Investors and traders are seeing mixed sentiment across Wall Street’s major stock markets on Monday as market participants prepare for the Federal Reserve’s monetary policy announcement, which is expected to be released later this week.
Leading the way down was the technology-focused Nasdaq Composite (COMP.:IND) which is down 0.5%At the other end is the blue-chip Dow (DJI) climbed higher by 0.4%. Also the S&P 500 index (SP500) was almost flat.
From a sector perspective, nine of the S&P’s 11 segments are in positive territory. The two segments that have advanced the most so far are Financials and Energy, while Info Tech has suffered the most.
The Treasury market fell. The shorter end of the 2-year U.S. Treasury yield (US2Y) fell 3 basis points to 3.55%. At the same time, the longer end of the 10-year U.S. Treasury yield (US10Y) fell 3 basis points to 3.62%. See how other yields are trading across the yield curve here.
On the economic front, the Empire State Manufacturing index posted its highest reading since April 2022 in September.
The Fed will meet on Tuesday and Wednesday, and a rate cut is widely expected. According to FedWatch ToolThe probability of a 50 basis point rate cut on Wednesday is 61%, while the probability of a 25 basis point cut is 39%.
“The economic data did not provide a convincing case for a 50bp cut at the upcoming meeting,” Standard Chartered said. The firm added: “A 50bp cut and a miss would likely be worse than a 25bp cut and a miss.”
“A rate cut is clearly expected as US inflationary pressures continue to ease. However, a rate cut of more than 25 basis points seems unlikely – while the Fed has been late in cutting rates, a bigger move could be seen as a sign of panic. More frequent cuts seem more likely than larger cuts,” said Paul Donovan of UBS.
On the political front, former President Donald Trump was safe and sound after the Federal Bureau of Investigation said there was an attempted bombing at his golf course in West Palm Beach, Florida, on Sunday.
In terms of stocks that are moving, Intel (INTC) shares are up after reports that the company is set to receive up to $3.5 billion in federal grants to produce semiconductors for the Pentagon.
