Tech stocks drag on S&P 500, Nasdaq as Fed meeting.
- On Monday Tech stocks drag on S&P 500, Nasdaq as Fed meeting. As investors awaited the Federal Reserve’s pivotal monetary policy. Decision later in the week they remained cautious. Most traders are anticipating a significant reduction in borrowing costs.
Major Stock Movements
- Apple: Shares of Apple fell by 3.2% after an analyst from TF International Securities reported weaker than expected. Demand for the new iPhone 16 models.
- Intel: Intel’s stock rose following a report that the chipmaker qualified for federal grants.
- Amazon and Tesla: Amazon.com lost 0.70%, and Tesla fell 1.7%.
Dow Hits Record High
- Dow Jones: The Dow reached an intraday record high. While the S&P 500 is nearing its own milestone.
Index Performance
- Dow: Up 0.63%
- S&P 500: Down 0.02%
- Nasdaq: Down 0.68%
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Semiconductor Sector Update
Rate-sensitive chip stocks experienced declines:
- Nvidia (NVDA): Down 2%
- Broadcom (AVGO): Down 2.2%
- Qualcomm (QCOM): Down 1.5%
The Philadelphia SE Semiconductor index fell by 1.7%.
Key Market Developments
Overview of Recent Trends
Markets have been experiencing a prolonged bull run, which began at the start of the year. This trend is largely driven by the anticipation of imminent monetary policy easing by the Federal Reserve.
Impact of Recent Optimism
Significant weekly gains and recent optimism have played a crucial role in sustaining the market’s upward trajectory. These gains reflect a positive sentiment among investors.
Analysis of Economic Factors
Role of Monetary Policy Expectations
Expectations regarding rate cuts by the Federal Reserve have been a major factor influencing market behavior. Traders are closely monitoring any hints of changes in monetary policy.
Influence of Economic Fundamentals
Beyond policy expectations, a strong economy has also been supporting the bull run. Analysts argue that economic fundamentals are critical to understanding the market’s current performance.
Market Sentiment and Future Outlook
Current Sentiment Analysis
Investor sentiment remains optimistic, bolstered by both economic strength and anticipated policy changes. This optimism is reflected in ongoing market gains.
Long-Term Implications
Looking ahead, the interplay between economic fundamentals and monetary policy will continue to shape market trends. Understanding this dynamic is essential for forecasting future market movements.
Odds for a 50-basis-point cut are at 61% from 30% a week ago. According to the CME Fed Watch Tool, which showed a 39% probability of a 25-basis-point reduction. There is concern that an outsized move could mean the Fed sees the economy cooling at a faster-than-anticipated pace.
“Influential investors have been talking about the need for a 50-basis-point cut and we’re seeing increased talk of recession risks. As a result. There’s betting that we will get something. Other than the 25-bps cut,” said Sam Stovall, chief investment strategist at CFRA Research.
“It would be a good thing for the Fed to imply that they are ahead of the curve.”
At 09:50 a.m. the Dow Jones Industrial Average (.DJI). Opens new tab rose 260.54 points, or 0.63%, to 41,654.32, the S&P 500 (.SPX). Opens new tab lost 1.70 points, or 0.02%, to 5,625.06 and the Nasdaq Composite (.IXIC). Opens new tab lost 123.01 points, or 0.68%, to 17,564.41.
Seven of the 11 S&P 500 sectors gained, although rate-sensitive tech stocks (.SPLRCT). Opens new tab declined 1.2%, while banks (.SPXBK), opens new tab rose 0.70%.
Among other movers. Intel Corp (INTC.O), opens new tab climbed 2.7% after a report showed. The chipmaker has officially qualified for as much as $3.5 billion in federal grants to make semiconductors for the U.S. Department of Defense.
In economic data, reports on retail sales, weekly jobless claims, housing starts and industrial production are due through the week.
Advancing issues outnumbered decliners by a 2.03-to-1 ratio on the NYSE, and by a 1.16-to-1 ratio on the Nasdaq.
The S&P 500 posted 75 new 52-week highs and one new low. While the Nasdaq Composite recorded 84 new highs and 24 new lows. year.
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