April 29 (Reuters) - Wall Street's main indexes crept higher in volatile trading on Monday as shares of Tesla and Apple advanced while investors exercised caution ahead of the Federal Reserve's interest rate decision later in the week.
Tesla (TSLA.O), opens new tab shares shot up nearly 13%, driving a 1.8% rise in the consumer discretionary sector (.SPLRCD), opens new tab, after the electric vehicle maker cleared some key regulatory hurdles that had long hindered the roll-out of its self-driving software in China, its second-largest market.
Apple (AAPL.O), opens new tab added 3.5% after a report that the iPhone maker had renewed discussions with OpenAI about using the startup's generative artificial intelligence (AI) technology. Bernstein upgraded the stock to "outperform".
U.S. stocks closed higher on Friday, buoyed by moderate inflation data and a rally in megacap growth stocks following robust quarterly results from technology heavyweights Alphabet (GOOGL.O), opens new tab and Microsoft.
Also offering support, Israel-Hamas peace talks in Cairo eased fears of a wider conflict in the Middle East.
Focus will now shift to the Fed's interest rate decision due on Wednesday, ahead of a key jobs report on Friday that could set the tone for market direction in the near-term.
"Markets are a little fragile right now and people are hanging on every data point and are still trying to figure out whether the inflation numbers in the three months were a beginning of a trend and whether GDP last month was a significant slowdown or a one-off," said Chris Jackson, senior vice president at UBS Wealth Management.
Money markets are pricing in just about 35 basis points (bps) of interest rate cuts this year, down from about 150 bps seen at the beginning of the year, according to LSEG.
At 09:46 a.m. the Dow Jones Industrial Average (.DJI), opens new tab rose 86.82 points, or 0.23%, to 38,326.48, the S&P 500 (.SPX), opens new tab gained 6.08 points, or 0.12%, to 5,106.04 and the Nasdaq Composite (.IXIC), opens new tab gained 10.48 points, or 0.08%, to 15,940.42.
Offsetting the optimism, the communication services sector (.SPLRCL), opens new tab lost 1.3%, steered by shares of Alphabet (GOOGL.O), opens new tab and Meta Platforms (META.O), opens new tab that shed more than 2% each.
Earnings season is in full swing, with adjusted blended earnings for the first quarter estimated to grow 8.7% on a year-over-year basis, according to LSEG data.
Domino's Pizza (DPZ.N), opens new tab jumped 3.3% after topping Street expectations for first-quarter same-store sales, as consumers in the United States tapped into the pizza chain's spruced-up loyalty program and other promotional offerings.
Of the 229 companies in the S&P 500 that have reported quarterly earnings as of Friday, 77.7% surpassed analyst expectations, compared with a long-term average of 66.7%.
Among other movers on Monday, Paramount Global (PARA.O), opens new tab gained 5.6% after a report that the Redstone family and Skydance Media CEO David Ellison have made concessions to make a potential change in control of the streaming firm more appealing for other investors.
A fall in bitcoin prices pulled down cryptocurrency-linked stocks in trading. Crypto exchange Coinbase Global (COIN.O), opens new tab and crypto miners Riot Platforms (RIOT.O), opens new tab and Marathon Digital (MARA.O), opens new tab were down between 4% and 8%.
Advancing issues outnumbered decliners by a 2.99-to-1 ratio on the NYSE and by a 2.34-to-1 ratio on the Nasdaq.
The S&P 500 posted 14 new 52-week highs and no new lows, while the Nasdaq recorded 37 new highs and 16 new lows.
Reporting by Shristi Achar A and Johann M Cherian in Bengaluru; Editing by Devika Syamnath
