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Nvidia AI developer conference kicks off with new chips in

focus

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Alphabet jumps on report of talks to build Gemini AI into

iPhone

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Nasdaq says issues impacting connectivity resolved

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Indexes up: Dow 0.43%, S&P 0.90%, Nasdaq 1.24%

(Updates prices at 02:27 p.m ET/ 1827 GMT)

By Sinéad Carew and Bansari Mayur Kamdar

March 18 (Reuters) - Wall Street's main indexes rose on

Monday, with a rally in megacap growth stocks such as Alphabet

and Tesla supporting a rebound in technology-heavy Nasdaq while

investors also waited for the U.S. Federal Reserve's meeting

this week.

Growth stocks were outperforming, with Alphabet

gaining 4.8% after a media report that Apple ( AAPL ) is in

talks to build Google's Gemini AI engine into the iPhone.

This boosted the communication services sector,

which lead gains among the 11 major S&P 500 sectors and was up

2.9% after earlier hitting its highest level since Sept. 2021.

Tesla rose 6.4% after the electric carmaker said it

would increase the price of its Model Y EVs in some European

countries on March 22, by approximately 2,000 euros ($2,177) or

its equivalent in local currencies.

Trading was choppy in artificial intelligence poster-child

Nvidia ( NVDA ), which kicks off its annual developer

conference, with investors waiting for new chip announcements

from Chief Executive Jensen Huang after the close. The stock was

last up 1% after rising as much as 5% earlier in the day.

The Philadelphia Semiconductor index also pared gains

and was last up 0.6%. The S&P 500 technology index was up 1%.

"Tech, semis all of it is a little over cooked. Once

something is priced to perfection the next step is usually

consolidation or some type of disappointment," said Sameer

Samana, Senior Global Market Strategist at Wells Fargo

Investment Institute in Charlotte, NC.

At 02:27 p.m. the Dow Jones Industrial Average

rose 164.61 points, or 0.43% , to 38,879.38, the S&P 500

gained 45.90 points, or 0.90%, to 5,162.99 and the Nasdaq

Composite gained 197.72 points, or 1.24%, to 16,170.89.

Investors were also preparing for the Fed meeting in hopes

of clues about the first rate cuts. Stronger-than-expected

inflation figures have prompted traders to rethink when and by

how much policymakers will lower rates this year, with traders

pulling back bets for a June rate cut from just a week ago,

according to the CME FedWatch Tool.

Goldman Sachs on Monday said they now expect three interest

rate cuts in 2024, compared with four expected earlier, after

inflation came in a bit firmer than expected.

If the Fed were to take a hawkish tone when its policy

meeting concludes on Wednesday, this could pressure stocks.

"The fact we're up today provides investors with an

opportunity to take profits ahead of the Fed which is more

likely to disappoint than to support the recent rally in risk

assets. They've tied themselves to the data and the data

suggests less need to ease policy," said Samana.

Exchange operator Nasdaq said it resolved an issue

related to connectivity and stock orders that had affected early

trading for more than two hours on Monday.

U.S.-listed shares of Xpeng climbed 2.4% on the

company's plans to launch a cheaper EV brand amid fierce price

competition.

Boeing ( BA ) shed 1.3% after a media report that a federal

grand jury in Seattle issued a subpoena to the planemaker over

the Jan. 5 midair blowout of a Boeing ( BA ) door plug on an Alaska

Airlines flight.

Super Micro Computer ( SMCI ), which joined the S&P 500 on

Monday, gave up earlier gains and fell 6.6%. However, the stock,

which has been boosted by bets it would benefit from AI, is

still up around 245% for the year-to-date.

Advancing issues outnumbered decliners by a 1.49-to-1

ratio on the NYSE, which showed 197 new highs and 47 new lows.

On the Nasdaq 2,249 stocks rose and 1,947 fell as advancing

issues outnumbered decliners by about a 1.16-to-1 ratio.

The S&P 500 posted 39 new 52-week highs and no new lows

while the Nasdaq recorded 91 new highs and 109 new lows.