New York (Sept. 23, Reuters) – U.S. stock markets closed with modest gains on Monday as investors continued to analyze the Federal Reserve’s recent decision to cut interest rates and assess the central bank’s next moves. Dow Jones Industrial Average rose by 61.29 points, or 0.15%, to 42,124.65, while the S&P 500 gained 16.02 points, or 0.28%, closing at 5,718.57. Nasdaq Composite also saw a small uptick, rising by 25.95 points, or 0.14%, to 17,974.27.
Last week’s 50 basis-point rates cut by the Federal Reserve marked the beginning of a new easing cycle, igniting a sharp rally in markets and countering the historical trend of September being a weak month for equities. Investors are now closely monitoring comments from several key Fed officials as they look for signs of further monetary policy adjustments.
Three Federal Reserve bank presidents – Raphael Bostic, Neel Kashkari, and Austan Goolsbee – voiced support for last week’s rate cut and indicated that more cuts could be on the horizon for the remainder of the year. Market predictions, reflected in CME Group’s FedWatch tool, suggest a near 50-50 chance of a significant rate cut at the central bank’s November meeting, with an overall reduction of 74 basis points anticipated by year’s end.
Economic Data and Investor Sentiment
In addition to the Federal Reserve’s outlook, market participants focused on the latest economic data, which showed U.S. business activity remained steady in September. However, the report also indicated that prices for goods and services were rising at the fastest rate in six months, signaling potential inflationary pressure.
“re’s a bit of a ‘wait-and-see’ approach among investors right now, as y try to figure out if Fed can pull off a soft landing,” said Sam Stovall, Chief Investment Strategist at CFRA Research.
Sector Performance and Market Movers
Eight of eleven major S&P 500 sectors recorded gains on Monday, led by the energy sector, which saw a 1.31% increase. Conversely, healthcare stocks underperformed, with a 0.25% decline. Among standout performers, electric vehicle maker Tesla surged by 4.65%, and Meta Platforms saw a 0.6% gain after Citigroup raised its price target for the tech giant.
In corporate news, Intel shares rose 3.05% following reports that Apollo Global Management offered to invest up to $5 billion in the chipmaker. However, General Motors saw its stock slip by 1.72% after a downgrade by Bernstein, which lowered its rating to “market perform.”
Eyes on Inflation Data
Traders are now eagerly awaiting the release of the Federal Reserve’s preferred inflation measure, the Personal Consumption Expenditures (PCE) index, set to be released on Friday. Analysts expect this data to be a key market-moving event of the week as it provides further insights into inflationary trends and the Fed’s potential policy adjustments.
Advancing issues outnumbered decliners by a 1.48-to-1 ratio on the New York Stock Exchange, with 505 new highs and 36 new lows. S&P 500 recorded 62 new 52-week highs and one new low, while Nasdaq Composite saw 80 new highs and 123 new lows.
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