Megacaps' rally lifts tech-heavy Nasdaq 1%

The communication services sector jumped 3.6%, leading gains among the 11 major S&P 500 sectors.

Tesla rose 6.7% 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.

Focus will also be on AI-darling Nvidia, which kicks off its annual developer conference, with investors focused on new chip announcements from Chief Executive Jensen Huang in an afternoon keynote address. The chipmaker climbed 1.2%.

"The tail wind for the AI darlings sits with Nvidia's annual artificial intelligence conference ... an event that could be so important to the stock that it has been dubbed the 'AI Woodstock'," said Art Hogan, chief market strategist at B Riley Wealth.

Peers Micron Technology and Intel added 1.5% and 0.3%, respectively, while the Philadelphia Semiconductor index climbed 0.5%.

Wall Street, led by optimism around AI, hit fresh all-time highs in March, before pulling back some gains last week.

Stronger-than-expected inflation figures have prompted investors to rethink when and by how much policymakers will lower rates this year, with traders pulling back bets of a June rate cut to around 59% from 71% last week, according to the CME FedWatch Tool.

A hawkish tilt by the Fed in its policy meeting that concludes on Wednesday could further pressure the high-flying indexes.

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.

Exchange operator Nasdaq said it has resolved an issue related to connectivity and stock orders after more than two hours.

At 11:24 a.m. ET, the Industrial Average was up 180.81 points, or 0.47%, at 38,895.58, the S&P 500 was up 51.04 points, or 1.00%, at 5,168.13, and the Nasdaq Composite was up 224.12 points, or 1.40%, at 16,197.29.

U.S.-listed shares of Xpeng climbed 2.9% on the company's plans to launch a cheaper EV brand amid fierce price competition.

Boeing shed 1.0% 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 door plug on an Alaska Airlines flight.

Super Micro Computer, which joined the S&P 500 on Monday, erased early gains and fell 5.6%.

Advancing issues outnumbered decliners by a 1.49-to-1 ratio on the NYSE and by a 1.20-to-1 ratio on the Nasdaq.

The S&P index recorded 32 new 52-week highs and no new lows, while the Nasdaq recorded 52 new highs and 78 new lows.