Stocks looked like they were headed for a win Monday before a round of late-afternoon selling sent two of the three main benchmarks into the red by the close. Caution appears to be setting in ahead of Tuesday morning's key inflation update, particularly after recent data has signaled a resilient U.S. economy and lowered expectations for an interest rate cut at the next Fed meeting.
The Fed has indicated recently that it needs to see more evidence that the disinflation trend is intact before it starts cutting interest rates. Indeed, "the possibility of a March rate cut seems unlikely but coming into the summer months and back half of the year, we believe the disinflationary trend and other economic data will support such a decision," says Kevin Simpson, founder and chief investment officer at Capital Wealth Planning.
