*

S&P March flash Composite PMI at 53.5 vs 51.6 in Feb

*

Lockheed Martin ( LMT ) drops after brokerage downgrade

*

Crypto stocks gain as bitcoin rallies

*

S&P 500 +1.49%, Nasdaq +1.95%, Dow +1.12%

(Updates with details of afternoon trading)

By Johann M Cherian and Noel Randewich

March 24 (Reuters) - The S&P 500 rallied to its highest

in two weeks on Monday, lifted by Nvidia ( NVDA ) and Tesla following

signs that the Trump administration might take a more measured

approach on tariffs against U.S. trading partners.

U.S. President Donald Trump had anticipated applying

reciprocal levies starting on April 2 but a set of

sector-specific tariffs is now likely to be excluded, according

to media reports over the weekend citing administration

officials.

A Trump administration official on Monday cautioned that the

situation was fluid and no final decisions had been made.

Investors scooped up battered technology shares, with Nvidia ( NVDA )

rallying 3.3% and Advanced Micro Devices ( AMD )

jumping 6.6%, sending the PHLX chip index 3.1% higher.

Tesla surged 10%, recovering some of its recent

steep decline, helped by optimism about scaled back U.S.

tariffs.

Financial markets have whipsawed in recent weeks due to

fears of an economic downturn after Trump announced a series of

tariffs last month on major U.S. trading partners, including

China, Mexico and Canada.

The S&P has recovered about 4% from its recent low on March

13, and it remains down over 6% from its February 19 record high

close.

"Investors are experiencing a slight sigh of relief, but at

the same time they are cynical about how long this may last,"

said Sam Stovall, chief investment strategist at CFRA

Research. "The causes of this manufactured correction have not

evaporated. They are tariffs and what the impact of tariffs

could be on economic growth, inflation and corporate profits."

Several companies have cited tariff uncertainty as they

lowered their forecasts for upcoming quarters. Data compiled by

LSEG as of Friday showed earnings of companies in the S&P 500

are expected to grow by 10.5% in 2025, down by 3.5 percentage

points since the beginning of the year.

The S&P 500 was up 1.49% at 5,752.18 points.

The Nasdaq gained 1.95% to 18,130.97 points, while the Dow

Jones Industrial Average was up 1.12% at 42,454.07 points.

The domestically focused Russell 2000 index rose over

2% to a two-week high, while the CBOE Volatility Index,

known as Wall Street's fear gauge, dropped 1.3 points to a

three-week low.

A survey showed U.S. business activity picked up in March,

while growing fears over import tariffs and deep government

spending cuts continued to weigh on sentiment. Investors are

awaiting data this week, including the Personal Consumption

Expenditure (PCE) price index - the Federal Reserve's preferred

inflation gauge - on Friday.

Dun & Bradstreet ( DNB ) rose almost 3% after the data and

analytics provider agreed to be acquired by private equity firm

Clearlake Capital in a $7.7 billion deal.

Lockheed Martin ( LMT ) fell 1.5% after BofA Global Research

downgraded the weapons maker to "neutral" from "buy".

Crypto stocks rallied with a 3.5% rise in bitcoin prices

, with MicroStrategy ( MSTR ) advancing 8.5% and Coinbase

up 6%.

Advancing issues outnumbered falling ones within the S&P 500

by a 6.2-to-one ratio.

The S&P 500 posted 4 new highs and no new lows; the Nasdaq

recorded 41 new highs and 76 new lows.