The major U.S. index futures are currently pointing to a modestly higher open on Monday, with stocks likely to see further upside following the rally to close out the previous week.

Stocks may continue to benefit from the upward momentum seen last week, which came amid a positive reaction to upbeat tech earnings.

Trading activity may be somewhat subdued, however, as traders look ahead to the Federal Reserve’s monetary policy announcement on Wednesday.

The Fed is widely expected to leave interest rates unchanged, but the accompanying statement and Fed Chair Jerome Powell’s post-meeting press conference may shed additional light on the outlook for rates.

Recent economic data has tamped down expectations of a near-term rate cut, with the central bank now seen as likely to leave rates unchanged until at least September.

Traders may also stick to the sidelines ahead of the release of an avalanche of earnings news this week along with the Labor Department’s closely watched monthly jobs report.

Stocks moved sharply higher during trading on Friday, largely offsetting the weakness seen during Thursday’s session. The major averages all moved to the upside on the day, with the tech-heavy Nasdaq leading the charge.

The major averages pulled back off their best levels late in the day but remained firmly positive. The Nasdaq surged 316.14 points or 2.0 percent to 15,927.90, the S&P 500 jumped 51.54 points or 1.0 percent to 5,099.96 and the Dow climbed 153.86 points or 0.4 percent to 38,239.66.

For the week, the Nasdaq spiked by 4.2 percent, the S&P 500 shot up by 2.7 percent and the Dow advanced by 0.7 percent.

The rally on Wall Street came amid a positive reaction to some of the latest earnings news from big-name tech companies.

Shares of Alphabet (NASDAQ:GOOGL) soared by 10.2 percent after the Google parent reported better than expected first quarter results and authorized its first-ever dividend as well as a $70 billion stock buyback.

Software giant Microsoft (NASDAQ:MSFT) also jumped by 1.8 percent after reporting fiscal third quarter results that exceeded expectations.

Shares of Snap (NYSE:SNAP) skyrocketed by 27.6 percent after the SnapChat parent reported first quarter results that exceeded expectations on both the top and bottom lines.

On the other hand, shares of Intel (NASDAQ:INTC) plunged by 9.2 percent after the semiconductor giant reported first quarter earnings that beat estimates but provided disappointing guidance.

Traders also seemingly reacted positively to closely watched readings on inflation released by the Commerce Department showing consumer prices in the U.S. increased in line with economist estimates in the month of March.

The Commerce Department said its consumer price index rose by 0.3 percent in March, matching the increase seen in February as well as economist estimates.

Excluding food and energy prices, core consumer prices also climbed by 0.3 percent for the second straight month, in line with expectations.

Meanwhile, the report said the annual rate of consumer price growth accelerated to 2.7 percent in March from 2.5 percent in February. Economists had expected the pace of growth to tick up to 2.6 percent.

The annual rate of growth by core consumer prices in March came in unchanged from February at 2.8 percent, while economists had expected the pace of growth to slow to 2.6 percent.

The readings on inflation, which are said to be preferred by the Federal Reserve, were included in the Commerce Department’s report on personal income and spending in the month of March.

“Given the elevated levels of inflation – and this is the new normal for 2024 – the market is going to need to get over hopes for Fed rate cuts,” said Chris Zaccarelli, Chief Investment Officer for Independent Advisor Alliance.

“We’re still optimistic on the market, however, as we believe that rate cuts aren’t necessary for the bull market to continue,” he added. “Instead, continued economic expansion and growth in corporate profits – which are already seeing from the largest companies in the market – are what will propel stock prices to new highs.”

Treasury yields moved lower following the release of the report, which may have helped mitigate any negative response to the data.

Semiconductor stocks saw substantial strength on the day despite the slump by Intel, with the Philadelphia Semiconductor Index surging by 2.6 percent.

Significant strength was also visible among software stocks following Microsoft’s upbeat results, resulting in a 1.5 percent gain by the Dow Jones U.S. Software Index.

Networking stocks also saw considerable strength on the day, driving the NYSE Arca Networking Index up by 1.5 percent.

Retail, computer hardware and brokerage stocks also showed notable moves to the upside, while utilities stocks bucked the uptrend.

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