Stock market today: Indexes trade mixed as investors look forward to major Fed decision
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- US stocks were mixed on Monday ahead of the Fed's expected rate cut later in the week.
- Fed fund futures show markets see odds of a 50 basis point cut as more likely than a 25 basis point move.
- Treasury yields edged lower, with the 10-year bond dipping to 3.64%.
US stocks were mixed on Monday ahead of a major Federal Reserve meeting that's expected to deliver the first interest rate cut in four years.
The S&P 500 and the Nasdaq Composite were lower while the Dow Jones Industrial Average climbed. Treasury yields dipped, with the 10-year bond down about one basis point to 3.64%.
The Fed will convene it's two-day Federal Open Market Committee meeting on Tuesday, with its rate decision to come on Wednesday at 2 p.m.
According to the CME FedWatch Tool, fed fund futures show markets think the odds of a larger, 50 basis point cut have risen to 65%. Investors in recent weeks have fretted over economic data that points to a slowdown in the US economy, and calls have grown for the Fed to enact a bigger cut to get ahead of a potential recession.
Rate cuts are largely expected to be a bullish development for the stock market, and investors have been clamoring for lower interest rates all year. Lower interest rates will impact everything from home loans to credit cards to auto loans.
On Monday, tech bull and Wedbush Securities analyst Dan Ives noted that coming rate cuts would reinvigorate the tech trade.
"In a nutshell we believe the stage is set for tech stocks to move higher into year-end and 2025 in our opinion as the Fed and Powell kick off its rate cutting cycle this week, macro soft landing remains the path, and tech spending on AI remains a generational spending cycle just starting to hit the shores of the tech sector," Ives wrote.
The artificial intelligence trade made a comeback last week after several weeks of turbulence following Nvidia's second-quarter earnings. Shares of Nvidia, Broadcom, and Oracle all soared last week as key players in the space delivered remarks addressing some of investors' biggest concerns about returns on massive AI spending.
Here's where US indexes stood shortly after the 9:30 a.m. opening bell on Monday:
- S&P 500: 5,628.94, up 0.1%
- Dow Jones Industrial Average: 41,715.54, up 0.8% (323 points)
- Nasdaq composite: 17,571.60, down 0.7%
Here's what else is going on:
- The risks keeping Wall Street's biggest stock bulls up at night.
- More analysts are recommending investors resist the AI FOMO and invest in defensive shares.
- People are souring on one of the country's hottest housing markets.
In commodities, bonds, and crypto:
- Oil futures rose. WTI crude increased 1.2% to $69.41 a barrel. Brent crude, the international benchmark, rose 1% to $71.35 a barrel.
- Gold was edged lower to $2,607 an ounce.
- The 10-year Treasury yield rose one basis point to 3.642%.
- Bitcoin was down 2%, trading at $58,620.