Traders work on the floor at the New York Stock Exchange on Sept. 9, 2024.
Brendan Mcdermid | Reuters
The S&P 500 inched lower Monday as investors await the Federal Reserve’s highly anticipated policy meeting, during which central bankers are expected to cut rates for the first time since 2020. Meanwhile, the Dow Jones Industrial Average rose to a new all-time high.
The S&P 500 pulled back 0.1%. The tech-heavy Nasdaq Composite shed 0.8%. Meanwhile, the 30-stock Dow added 119 points, or 0.4%.
Apple shares declined 3% after analysts at firms, including Bank of America and JPMorgan, noted that shipping times could point to lighter demand for iPhone 16 Pro models than the prior year.
Chip stocks like Nvidia, which led the market comeback last week, were lower as investors took off some of their bets. The AI giant lost 2.8% Monday. Broadcom fell 3%, while KLA and Marvell Technology dropped 3.5% and 2.5%, respectively.
The S&P 500 is around 1% away from its July record and could notch a new all-time high this week. After a rough start to a historically weak September, the three major U.S. indexes ended last week’s trading session in the green, with the S&P 500 and Nasdaq just closing their best week of 2024.
The Fed is set to meet on Tuesday and Wednesday and is widely anticipated to lower rates for the first time since it began its hiking cycle in March 2022. A cut this week would be a pivotal move, as many investors hope the decision could lower borrowing costs for companies and improve overall earnings growth — boosting economic growth.
The overnight lending rate now stands at 5.25% to 5.5%. The market is currently pricing in a 63% possibility that the central bank will cut rates by 50 basis points, per the CME Group’s FedWatch tool that measures fed fund futures data.
The financial and energy sectors added 0.9% Monday, outperforming the broader market while information technology slipped 0.7% in the largest sector losses of the day.
Many investors are “profit-taking” on big tech’s gains over the past year, particularly semiconductor stocks, said Christopher Barto, senior investment analyst at Fort Pitt Capital.
Investors are seeing “not necessarily a full rotation of market leadership; but other areas of the market are starting to perk up, and a lot of that has to do with the future rate cuts that are coming into play,” said Barto.
