U.S. stocks rallied for a second straight session Monday, as investors sought bargains after the Nasdaq and S&P 500 fell for four straight weeks and assessed the latest economic data to gauge the impact of the Trump administration's policies.
Retail sales rebounded marginally in February, but fell short of expectations, reflecting the increasing uncertainty over tariffs and large-scale firing of federal government employees. A separate report showed factory activity in New York State plummeted this month by the most in nearly two years.
"The only signs of a bounceback in spending from January's weather-induced slump, and stocking up ahead of tariffs, was in online spending," said Brian Jacobsen, chief economist at Annex Wealth Management in Menomonee Falls, Wisconsin.
"Sentiment is often a horrible predictor of spending, but the good vibes that have propped up spending are now a distant memory."
According to preliminary data, the S&P 500 gained 36.38 points, or 0.64%, to end at 5,675.32 points, while the Nasdaq Composite gained 55.26 points, or 0.31%, to 17,809.35. The Dow Jones Industrial Average rose 353.44 points, or 0.88%, to 41,841.63.
In addition, U.S. homebuilder sentiment dropped to a seven-month low in March as tariffs on imported materials raised construction costs.
When the Federal Reserve meets on Wednesday, it is widely expected to keep rates unchanged, according to CME's FedWatch Tool.
Fed officials will also announce economic projections with their policy statement, giving the most tangible evidence yet of how U.S. central bankers view the likely impact of Trump administration policies that have clouded a previously solid economic outlook.
The Federal Reserve Bank of Atlanta adjusted its forecast for first-quarter economic activity to show a 2.1% contraction, down from the March 7 estimate of a 1.6% contraction.
Stocks have tumbled in recent weeks, with the S&P 500 dropping last week by more than 10% from its February record high, commonly known as a correction. The market rebounded on Friday as investors shopped for shares that may fare better under Trump's policies.
The blue-chip Dow index stood roughly 3.5% away from a correction after recent gains over the past two sessions, while the Nasdaq confirmed it was in correction territory on March 6.
Of the 11 major S&P sectors, real estate and energy led gains.
Over the weekend, Treasury Secretary Scott Bessent warned in an interview that there are "no guarantees" the United States will escape a recession.
Tesla stumbled after brokerage Mizuho lowered its price target on the EV maker's stock to $430 from $515, which is down more than 40% on the year.
Quantum computing stocks such as D-Wave Quantum and Quantum Corp jumped as AI chip firm Nvidia's kicked off its annual conference.
Intel surged after Reuters reported incoming CEO Lip-Bu Tan has considered significant changes to its chip manufacturing methods and artificial intelligence strategies.