Overview:
The U.S. stock market had mixed results on Monday, as tech stocks dragged major indices, while rate cut expectations grew ahead of the Federal Reserve’s meeting later this week. The Dow Jones Industrial Average rose 0.55% to close at 41,622.08, while the S&P 500 eked out a 0.13% gain to close at 5,633.09. However, the Nasdaq Composite dropped 0.52%, closing at 17,592.13, weighed down by declines in key tech stocks like Nvidia and Apple, both of which shed more than 2% on the day.
Investors continue to anticipate a potential 50 basis point rate cut by the Federal Reserve as the central bank aims to manage slowing job growth and moderating inflation. The decision is expected on Wednesday, and traders are placing a 59% chance on the Fed going with the larger rate cut, up from 30% a week ago, according to CME FedWatch Tool.
In other notable news, shares of Trump Media & Technology Group reversed early gains, declining 3%, following news of a second assassination attempt on Republican presidential candidate Donald Trump. Meanwhile, crude oil prices rose as Hurricane Francine impacted production in the Gulf of Mexico, causing Brent crude to settle $1.14 higher at $72.75 a barrel.
Fear & Greed Index:
Neutral – Market sentiment remains cautious as investors await the Federal Reserve’s interest rate decision and weigh inflation data.
Key Indices (Closed Prices):
- Dow Jones Industrial Average: +0.55% at 41,622.08
- S&P 500: +0.13% at 5,633.09
- Nasdaq Composite: -0.52% at 17,592.13
Sector Performance:
- Winners:
- Energy: Crude oil prices surged due to Hurricane Francine disrupting production, pushing energy stocks higher.
- Gold Miners: Gold prices rose 0.22% to $2,582.39 an ounce, approaching an all-time high.
- Losers:
- Technology: Rate-sensitive tech stocks, particularly Nvidia and Apple, dragged the Nasdaq lower with losses of over 2% each.
Key Movers:
- Nvidia (NVDA): Dropped 2.3% amid concerns over weakening demand for AI chips.
- Apple (AAPL): Fell 2.1% after reports indicated lower-than-expected demand for the latest iPhone model.
- Trump Media & Technology Group (DJT): Reversed early gains and closed down 3% after news of a second assassination attempt on Donald Trump.
Economic Data:
- Treasury Yields: Short-dated U.S. debt hit a two-year low as the yield on the two-year note dropped 1.7 basis points, and the 10-year Treasury yield decreased to 3.618%.
- U.S. Dollar: The Dollar Index fell 0.33% to 100.69, while the dollar weakened against the yen, falling 0.13% to 140.63 yen as lower U.S. bond yields diminished the greenback’s appeal.
- Oil Prices: Brent crude rose $1.14 to $72.75 per barrel, while U.S. crude climbed $1.44 to $70.09, driven by supply disruptions due to the hurricane.
Outlook:
As the market awaits the Federal Reserve’s decision on interest rates, investor sentiment remains cautious. The Fed is expected to announce a significant rate cut of 50 basis points to keep the economy on track amid moderating inflation and slowing job growth. However, concerns about tech sector volatility remain, particularly as Apple and Nvidia face headwinds. Energy stocks, on the other hand, are likely to continue benefiting from rising oil prices caused by production disruptions in the Gulf of Mexico.
Looking ahead, the upcoming Federal Reserve meeting, along with critical economic data, including U.S. retail sales and industrial production, will play pivotal roles in shaping market sentiment.