Stocks ended mixed Monday, with the Dow ending at a record high, as investors adopted a cautious stance ahead of a crucial Federal Reserve interest-rate decision later in the week.
The Dow Jones Industrial Average ended up 0.55%, or 228.30 points, to finish the session at a record high of 41,622.08, while the S&P 500 gained 0.13% to 5,633.09, and the tech-heavy Nasdaq slipped 0.52% to end the day at 17,592.13.
Apple shares fell after analysts noted that shipping times could point to lighter demand for iPhone 16 Pro models than the prior year. AI giant Nvidia also lost ground
Bill Adams, chief economist for Comerica Bank, said the firm is forecasting for the Fed to lower the federal funds targeted by a quarter of a percent at Wednesday’s meeting and hold the pace of the balance sheet reduction steady.
Citing a cooling labor market and a balanced focus on their dual mandate for maximum sustainable employment and price stability, Adams said "monetary policymakers' forward guidance and forecasts are anticipated to signal the week’s easing will be the first in a series of cuts through 2025."
Updated at 12:01 PM EDT
Dow record
The Dow has eased from its early-session peak, when it traded at a fresh record high of 41,733.97 points to take its year-to-date gain closer to 10.5%, with the 30-stock average last trading 0.33% higher on the day at 41,530.60 points.
More broadly, the S&P 500 was marked 8 points lower at mid-day, with the Nasdaq down 148 points on the session and the Russell 2000 little-changed from its late Friday close heading into the crucial Fed rate decision on Wednesday.
Related: Markets want a big Fed rate cut. What happens next is more important.
Updated at 11:03 AM EDT
Sour AI Apple
Apple shares are a big downside mover Monday, falling more than 3.3% to a fresh one-month low following reports of muted early demand for the new iPhone 16.
The decline is also pulling AI-focused stocks lower as well, Nvidia down 2.4% and Advanced Micro Devices (AMD) falling 0.1%.
Related: Apple stock slides as big iPhone 16 bet sputters
Updated at 9:34 AM EDT
Mixed open
The S&P 500 was marked 4 points, or 0.06% lower in the opening minutes of trading, with the Nasdaq down 156 points, or 0.92%, thanks to a 3.1% decline for Apple.
The Dow, meanwhile, added 270 points while the mid-cap Russell 2000 rose 9 points, or 0.41%.
S&P 500 Opening Bell Heatmap (Sept. 16, 2024)$SPY -0.03%🟥$QQQ -0.67%🟥$DJI +0.64%🟩$IWM +0.59%🟩 pic.twitter.com/hkUnosvk5B
— Wall St Engine (@wallstengine) September 16, 2024
Updated at 8:30 am EDT
Eye-catching move
Bausch + Lomb Corp (BLCO) surged more than 20% in premarket trading following a report from Britain's Financial Times that the eye care group, which was spun from parent Bausch Health Cos. Inc. (BHC) in 2022, is looking to sell itself to a private equity group.
The FT said the company is working with Goldman Sachs on the possible sale, although opposition from lenders, including Apollo Global Management, could complicate the overall timeline
Bausch + Lomb Corp shares were last marked 20.2% higher in premarket trading to indicate an opening bell price of $18.79 each and a market value of around $6.6 billion.
Eyecare Company Bausch + Lomb $BLCO Explores Sale - FT
— InsideArbitrage (@InsideArbitrage) September 16, 2024
👁️Bausch + Lomb is working with advisers from Goldman Sachs $GS to test interest from potential buyers.
👁️The eye care business is likely to draw interest from private equity groups. pic.twitter.com/cmW90fCdnE
Stock Market Today
Stocks closed out Friday with their strongest weekly gain of the year, with the S&P 500 adding around $1.8 trillion in value to trim its overall September decline to around 0.4%, thanks in part to renewed bets on a big Fed rate cut and solid signals on the health of the U.S. consumer.
Tech stock performance was solid as well, with the Nasdaq rising 5.95% in its best week of the year to pare its monthly decline to just 0.17%, tied to big rebounds for Nvidia (NVDA) and Microsoft (MSFT) .
Focus this week, however, will be firmly on the Fed's two-day rate meeting, which wraps up Wednesday with the central bank's September rate decision, as well as on fresh growth and inflation prospects, which will form the basis for its expected policy path over the final months of the year.
Both the Bank of England and the Bank of Japan will publish key rate decisions on Thursday in London and Tokyo, as well.
The CME Group's FedWatch pegs the odds of a 50 basi point rate cut from the Fed at around 59% heading into the week, with at least two more quarter-point cuts in November and December.
Related: Markets push for big Fed rate cut after inflation reports
Longer term, markets are also betting on sustained Fed rate easing into 2025, with the gap between 2-year Treasury note yields and the current Federal Funds Rate trading at the widest levels in more than three decades.
"The bigger question is whether the market has been a bit optimistic about the scale of rate cuts over the next 12 months, with rates expected to be around 3% in a year’s time, down from the current level of 5.3%," said Lindsay James, an investment strategist at Quilter Investors.
"It appears that the market has already priced in the full potential for rate cuts in the year ahead, though this may not materialize if inflation were to spike again," she added. "While the US economy currently looks likely to avoid recession, some caution is still warranted."
Benchmark 2-year notes were last seen trading at 3.557% heading into the start of the New York session, with 10-year note yields holding at 3.646%.
The U.S. dollar index, which tracks the greenback against a basket of six global currencies, was marked 0.4% lower at 100.711, the lowest in more than eight months.
On Wall Street, futures contracts tied to the S&P 500 suggest a 4-point opening-bell gain for the benchmark, with the Dow Jones Industrial Average called around 75 points higher.
The tech-focused Nasdaq is priced for a 10-point dip, thanks in part to premarket declines for Nvidia and Apple (AAPL) .
Related: Gas prices are plunging and it's bigger news than you think
Other stocks on the move include Intel (INTC) , which rose 3.2% following a Bloomberg report that suggested the chipmaker had qualified for a $3.5 billion grant from the U.S Department of Defense.
Trump Media & Technology (DJT) shares were last seen trading 3.5% higher following news of a potential assassination threat to former President Donald Trump Sunday at his golf course in Florida.
More Wall Street Analysts:
- Analyst says Intel should drop a key business to survive
- Analysts adjust Bookings.com stock price target on travel market
- Analysts place bets on Las Vegas strip casino stocks
In overseas markets, stocks traded cautiously in Europe, with the regional Stoxx 600 benchmark rising 0.05% in early Frankfurt trading and the FTSE 100 slipped 0.15% in London.
Overnight in Asia, markets in Japan were closed for that country's Respect for the Aged Day holiday, while the regionwide MSCI ex-Japan index rose 0.49% into the close of trading.
Related: Veteran fund manager sees world of pain coming for stocks
