By Yasin Ebrahim
Investing.com – The Nasdaq closed at a record high on Monday, as optimism the economy will emerge from the recession sooner rather than later continued to underpin investor sentiment on risk.
The Nasdaq Composite rose 1.13%, to 9,924.75, closing above 9,900 for the first time ever. The Dow Jones Industrial Average rose 1.70%, or 461 points, and the S&P 500 gained 1.21% to turn positive for the year.
The record day for the tech-heavy Nasdaq was helped by a turnaround in some FAANG stocks following intraday weakness as signs of progress on reopening the U.S. continued to drive expectations for a quicker economic recovery.
New York City, the epicenter of the pandemic, began to reopen on Monday, boosting hopes of a quicker economic recovery just as data showed the U.S. officially entered a recession in February, marking an end to its longest expansion on record.
"The unprecedented magnitude of the decline in employment and production, and its broad reach across the entire economy, warrants the designation of this episode as a recession, even if it turns out to be briefer than earlier contractions," The National Bureau of Economic Research said.
Optimism on the economy has continued to galvanize cyclical sectors like energy, industrials and financials.
Energy led the broader move higher, shrugging off a fall in oil prices after Saudi Arabia, UAE and Kuwait said they would end voluntary output cuts.
The announcement arrived as OPEC and its allies, collectively known as OPEC+, agreed on Saturday to extend production cuts (set in April) through July.
Elsewhere, Tesla (NASDAQ:TSLA) jumped 7% to close at a record high after data showed demand for its Model 3 in China returned in May, triggering bullish commentary on Wall Street.
In May, Tesla sold 11,000 Model 3 vehicles according to initial reports, up from just under 4,000 sold in April.
This is a "very strong indicator that demand in this key region is starting to ramp and Tesla appears to be on a run rate to hit 100,000 unit deliveries in the first year for Giga 3," Wedbush said in a note.