US stocks traded marginally higher on Monday as investors paused to catch their breath near record levels ahead of a series of more signals from the U.S. Federal Reserve this week.
At 09:35 ET (13:35 GMT), the Dow Jones industrial average was trading 55 points, or 0.1% higher, the S&P 500 gained 8 points, or 0.1%, while the NASDAQ Composite was up 30 points, or 0 .2%.
Optimism for a rate cut after the Federal Reserve’s excessive tapering drove the S&P 500 and Dow Jones Industrial Average to record highs last week. While the NASDAQ Composite also gained, recent weakness in tech stocks kept the index well below its lifetime highs.
Fed indications, PCE inflation this week
A number of Fed officials and members of the rate-setting committee are due to speak this week – most notably Chairman Jerome Powell on Thursday.
The central bank cut interest rates by 50 basis points last week, signaling the start of an easing cycle that could see rates cut by as much as 125 basis points this year.
While the move had pushed Wall Street to record highs, overall gains were limited as the Fed maintained a less dovish medium- to long-term outlook.
The central bank has signaled that neutral interest rates are likely to be much higher than previously seen.
The pace of the Fed’s easing cycle is also expected to depend heavily on the US economy.
The PCE price index – the Fed’s preferred gauge of inflation – is due on Friday and is expected to provide more clues on interest rates. Inflation is still trending well above the Fed’s annual target of 2%.
Before that, investors will watch data on economic activity in the services and manufacturing sectors on Monday, while US House Republicans unveiled a new plan that would keep the government funded for three months and avoid a partial closure.
Apollo to invest in Intel?
In the corporate sector, Apollo Global Management has offered to invest up to $5 billion in struggling chipmaker Intel (NASDAQ:INTC), according to Bloomberg News. Intel stock rose about 1%.
The asset manager said it would be willing to make an equity-style investment in Intel, Bloomberg reports, with the chipmaker’s top management considering the offer.
Intel is struggling with a sharp decline in sales and has previously outlined a number of cost-cutting measures, including cutting staff by up to 15,000 employees.
Crude gains on Middle East tensions
Crude prices rose on Monday, boosted by concerns that escalating conflicts in the Middle East could limit regional supply.
By 09:35 Greek time, Brent had gained 0.2% to $73.83 a barrel, while US crude (WTI) futures were trading 0.2% higher at $71.11 a barrel.
Israel has carried out a series of strikes in Gaza and Lebanon, and the ongoing fighting has raised concerns that a wider conflict in the Middle East will disrupt supplies, tightening global markets.
Crude prices rebounded two weeks from near three-year lows, also boosted by supply fears in the wake of Hurricane Francine.
(Ambar Warrick contributed to this article).
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