FX.co ★ U.S. Stocks Give Back Ground After Early Rally But Close Mostly Higher

Early in the trading session on Monday, stocks surged significantly but lost some ground over the course of the day. However, they managed to close mainly on a high note. This positive movement enabled the Nasdaq and the S&P 500 to recover after three consecutive sessions of closing lower.

Despite some pressure leading to a close, the major averages managed to close on a positive note. The Nasdaq rose by 130.27 points or 0.8 percent to close at 16,103.45, the S&P 500 increased by 32.33 points or 0.6 percent to close at 5,149.42, and the Dow Jones Industrial Average increased by 75.66 points or 0.2 percent to close at 38,790.43.

Technology stocks were major contributors to the early Wall Street rally, with the tech-centric Nasdaq making a particularly strong surge. Shares of Alphabet Inc. (GOOGL) witnessed a 4.6 percent hike following a Bloomberg report that Apple Inc. (AAPL) is in discussion to integrate Google's Gemini artificial intelligence engine into the iPhone.

Nvidia Corp. (NVDA) also experienced a hike early in the session ahead of its GTC Conference where updates on its AI initiatives were expected to be presented. Its shares regained some ground before closing the day up by 0.7 percent. On the other hand, Super Micro Computer Inc. (SMCI) shares dropped by 6.4 percent after the IT company was included in the S&P 500 prior to the commencement of trading.

Traders are keenly awaiting the Federal Reserve's two-day monetary policy meeting on Tuesday and Wednesday. While the interest rates are expected to remain unchanged, the bank's accompanying statement and economic projections could significantly influence future interest rates.

The recent inflation readings, which were higher than expected, have dampened optimism regarding the Fed's first rate cut, anticipated in June.

In domestic economic news, the National Association of Home Builders reported an unexpected boost in U.S. homebuilder confidence in March. The NAHB/Wells Fargo Housing Market Index grew to 51 in March from 48 in February, surpassing predictions that it would remain unchanged. This unexpected rise has brought the housing market index above 50 for the first time since it reached 56 in July.

International Markets saw mostly positive trends in the Asia-Pacific region on Monday with Japan's Nikkei 225 Index surging by 2.7 percent and China's Shanghai Composite Index growing by 1.0 percent. European markets, however, saw a modest dip. The French CAC 40 Index dipped by 0.2 percent, the U.K.'s FTSE 100 Index edged down by 0.1 percent, and the German DAX Index closed just below the unchanged line.

In the bond market, treasury bonds extended the previous week's declining trend, leading to an increase of 3.6 basis points in the yield of the ten-year note, achieving a three-month closing high of 4.340 percent.

Tuesday's trading activity is expected to be moderate, as traders anticipate the Federal Reserve's announcement. However, a report on new residential construction is predicted to draw some attention.