Traders work on the floor at the New York Stock Exchange (NYSE) in New York City, U.S., September 9, 2024.
Brendan Mcdermid | Reuters
The S&P 500 was little changed 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 traded 0.1% higher while the Nasdaq Composite shed 0.5%. The 30-stock Dow outperformed, jumping 320 points, or 0.8%.
Apple shares declined more than 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.
The S&P 500 is less than 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 are widely anticipated to make its first interest rate cut since it began hiking rates 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 is currently 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.
Stocks typically post strong gains during cycles where initial rate cuts are able to sustain economic expansion, BMO Capital chief investment strategist Brian Belski said.
“So long as nothing breaks in the economy, U.S. stocks remain firmly within a bull market, but with significantly strong trailing one-year performance headed into this initial rate cut, future gains are likely to be more muted relative to historical norms, in our view,” he said in a Friday note ahead.
