US stocks traded mixed on Monday as investors retreated ahead of this week’s Federal Reserve meeting, where the central bank is likely to begin a rate-cutting cycle.
At 11:02 Greek time (15:02 Greek time), the 30-stock Dow Jones industrial average was up 115 points, or 0.3%, while the benchmark S&P 500 was down 16 points, or 0.3% and the tech-heavy Nasdaq Composite was down 185 points, or 1.0%.
Markets were also somewhat cautious following reports of a second assassination attempt on Republican presidential candidate Donald Trump, although the former president was unharmed.
With the Fed meeting approaching, markets are divided on rate cuts
The Fed is due to meet later this week and is widely expected to start cutting interest rates, although traders are widely divided on the scale of the potential cut.
Traders are pricing in a 50% chance of a 50 basis point decline and a 50% chance of a 25 basis point decline, CME Fedwatch showed.
Wednesday’s move is likely to set the tone for the Fed’s plans to begin easing monetary policy as it addresses some concerns about a cooling economy and labor market. But recent economic readings have shown that inflation remains sticky.
Lower interest rates are also expected to provide a more accommodative environment for stocks in the coming months.
Dow, S&P near record highs
Wall Street’s main indexes performed strongly last week despite sticky inflation signs, as tech heavyweights were boosted by some opportunity buying and a resurgence of artificial intelligence hype.
Broader stocks also rose, with bets on rate cuts driving plays in economically sensitive sectors.
The S&P 500 rose 4% last week, while the Dow Jones industrial average rose 2.6%, both indexes near record highs.
The Nasdaq Composite rose nearly 6%, but remained well below the highs reached earlier this year.
Pfizer is profiting from the trial’s success
In the corporate sector, Pfizer ( NYSE:PFE ) rose 1.2% after the drugmaker said its experimental drug to fight a condition that causes cancer patients to lose appetite and weight showed positive results in an intermediate stage test.
Boeing ( NYSE:BA ) shares fell 0.5%, after falling more than 3% on Friday, as a strike by more than 30,000 workers extended into a fourth day on Monday, with company and union negotiators are set to resume talks on a labor contract on Tuesday.
Shares of Intel (NASDAQ:INTC) rose 3% after a report showed the chipmaker has officially qualified for up to $3.5 billion in federal grants to make semiconductors for the US Department of Defense.
Alcoa (NYSE:AA) rose 5.3% after the aluminum maker said it will sell a 25.1% stake in its joint venture with Saudi Arabia’s Ma’aden for $1.1 billion.
Crude rises ahead of Fed meeting
Crude prices rose on Monday ahead of an expected Fed rate cut later this week, although lingering concerns about demand continued to cap any serious gains.
By 11:05 Greek time, Brent was up 1.4% at $72.64 a barrel, while US crude futures (WTI) were trading 1.7% higher at $68.86 a barrel.
The US central bank is likely to begin an easing cycle on Wednesday, and lower interest rates bode well for economic growth, which in turn could help keep US fuel demand supported in coming months.
That said, Chinese economic data released over the weekend showed more economic weakness in the world’s biggest oil importer, while crude output in the Gulf of Mexico rebounded after Hurricane Francine, even though nearly a fifth of crude production remained offline .
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Written by D Fernando
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