S&P 500 inches higher led by tech shares to start the week

The S&P 500 gained on Monday as traders shook off recession fears and bought technology shares that were beaten up in the first quarter.

The Dow Jones Industrial Average traded marginally lower. The S&P 500 was flat, and Nasdaq Composite advanced 1.3%.

"With earnings season about two weeks away we're kind of in this lull where there's not a lot of big news that's likely to come out," said Ryan Detrick of LPL Financial. "Some consolidation after the big bounce that we've seen in stocks in the last three weeks kind of makes sense. That's kind of what we're seeing today."

Tech shares, which were among the hardest-hit sectors in the first quarter as investors feared the Fed's rate-hiking plans could hinder the group, rose on Monday.

Twitter gave the Nasdaq a lift after shares surged more than 25% following news that Elon Musk purchased a 9.2% passive stake in the company. Tesla's stock also rose 3.4% on the back of its latest quarterly electric vehicle delivery figures on Saturday, which came in above the year-earlier period.

Technology companies including Apple, Amazon, Nvidia and Microsoft were also up more than 1%.

Meanwhile, shares of Starbucks dipped 5.7% after the coffee chain suspended its share repurchase program.

A key section of the yield curve remained inverted after the 2-year and 10-year Treasury yields shifted for the first time since 2019 Thursday evening. The 5-year note yield is also trading above its 30-year counterpart.

"We think the current flattening is due to the concern that the Fed is behind the curve on hikes and will tighten policy beyond neutral, which will hurt growth," TD Securities said in a note to clients.

Meanwhile, oil moved higher with WTI crude jumping 3.7% and back above $100 a barrel, while Brent crude rose more than 3%, further raising investor concerns about a possible recession.

Oil's gains came as investors continue to watch the latest developments in Ukraine. German Chancellor Olaf Scholz said Sunday that Western nations will impose additional sanctions on Russia in the coming days.

"Equity and bond markets continued to send conflicting signals about the economic outlook," UBS said in a recent note to clients. "We caution against over-interpreting either signal. Yield curve inversions have historically predicted recessions with a long and uncertain lag, while hopes over cease-fire talks have ebbed and flowed," the firm added.

Wall Street is coming off a winning session, with the Dow, S&P 500 and Nasdaq all posting gains Friday. The S&P 500 also posted its third straight week of gains.

April is typically one of the best months for stocks, edging higher in the last 20 years by 2.41% on average, MKM Partners' JC O'Hara wrote in a note. Within 16 of the last 17 Aprils, the S&P has also inched higher.

"Strong gains on the employment front continue to signal a green light for investors despite multi-decade highs in inflation and concerns over higher rates and Fed tightening," noted Peter Essele, head of portfolio management for Commonwealth Financial Network. "The economy appears to be in exit velocity mode, with the only concern being the amount of labor supply available to fuel the robust recovery," he added.

On Wednesday the Federal Open Market Committee will publish the minutes from the central bank's March meeting, giving investors a deeper understanding into how the Fed views market conditions.