The stock market kicked off the new month with gains fueled by technology companies. Bond yields fell as disappointing factory data and a decline in consumer sentiment solidified bets on interest-rate cuts.

Equities hovered near all-time highs, following an unusually strong February driven by the artificial-intelligence euphoria. The frenzy around AI shares has blindsided many Wall Street forecasters, spurring a race among strategists to keep up with a market rally that’s already blowing past their expectations at the start of 2024.

Traders also kept a close eye on remarks from central bank officials.

Fed Bank of Richmond President Thomas Barkin said markets are pricing in fewer rate reductions in response to economic data, not because the central bank is winning a battle with investors. His Dallas counterpart Lorie Logan reiterated that it’ll likely be appropriate to start slowing the pace at which it shrinks its balance sheet. Governor Christopher Waller said he’d like to see the central bank’s holdings of mortgage-backed securities go to zero.

The S&P 500 hovered around 5,100. Dell Technologies Inc. surged on better-than-expected sales and profit. New York Community Bancorp sank after saying said it discovered “material weaknesses” in how it tracks loan risks. Treasury 10-year yields declined three basis points to 4.22 per cent. The dollar was little changed. Bitcoin traded near $62,000. Oil rose to almost $80.

Apollo Management Chief Economist Torsten Slok said that a re-accelerating US economy, coupled with a rise in underlying inflation, will prevent the Fed from cutting interest rates in 2024.

“The bottom line is that the Fed will spend most of 2024 fighting inflation,” Slok wrote in a Friday note to clients. “As a result, yield levels in fixed income will stay high.”

Meantime, Pacific Investment Management Co. is warning that US fiscal profligacy threatens to drag the Treasury market back to 1980s, a time when bond vigilantes demanded far higher compensation to own longer-dated bonds.

A combination of stickier inflation and deteriorating budget estimates “could start to reverse the 40-year downtrend” of a key measure of how much bond investors are compensated for holding long-term debt, according to Marc Seidner and Pramol Dhawan at Pimco.

Corporate highlights:

• Elon Musk sued OpenAI and its Chief Executive Officer Sam Altman, alleging they violated the artificial intelligence startup’s founding mission by putting profit ahead of benefiting humanity.
• Archer-Daniels-Midland Co. delayed the publication of its annual report and warned that it anticipates reporting a “material weakness” in the company’s internal financial reporting practices.
• B. Riley Financial Inc. posted a wider quarterly loss, halved its dividend and delayed filing its annual report, citing a review of transactions with a key client that have drawn attacks by short sellers.
• Hewlett Packard Enterprise Co. reduced its outlook for sales growth and profit in the current fiscal year, citing lower demand for networking products and a crunch in computer chip availability.
• Volkswagen AG said sales growth will slow this year as the auto industry grapples with slumping demand for electric vehicles and intensifying competition.
• Fisker Inc. is seeking a financial lifeline as liquidity challenges put its survival in doubt, the latest sign of stress in an electric vehicle market plagued by slowing growth and questions over consumer demand.

Some of the main moves in markets:

Stocks

• The S&P 500 rose 0.2 per cent as of 10:22 a.m. New York time
• The Nasdaq 100 rose 0.5 per cent
• The Dow Jones Industrial Average was little changed
• The Stoxx Europe 600 rose 0.4 per cent
• The MSCI World index rose 0.4 per cent

Currencies

• The Bloomberg Dollar Spot Index was little changed
• The euro rose 0.3 per cent to $1.0833
• The British pound was little changed at $1.2634
• The Japanese yen fell 0.2 per cent to 150.23 per dollar

Cryptocurrencies

• Bitcoin rose 0.7 per cent to $61,844.57
• Ether rose 1.8 per cent to $3,410.01

Bonds

• The yield on 10-year Treasuries declined three basis points to 4.22 per cent
• Germany’s 10-year yield was little changed at 2.42 per cent
• Britain’s 10-year yield was little changed at 4.12 per cent

Commodities

• West Texas Intermediate crude rose 2 per cent to $79.84 a barrel
• Spot gold rose 0.8 per cent to $2,060.02 an ounce

This story was produced with the assistance of Bloomberg Automation.