Dow Dips, S&P 500 and Nasdaq Rise; Tesla, Rivian, Lucid Lead Movers

Basio badr

ago 2 hours

Dow Dips, S&P 500 and Nasdaq Rise; Tesla, Rivian, Lucid Lead Movers

Wall Street is currently anticipating a crucial meeting by the Federal Reserve this week. On Monday, the S&P 500 opened just below a record closing high. However, the benchmark index recorded a slight decline of 0.1%, staying near its previous peak of 6890.89 set on October 28. In contrast, the Dow Jones Industrial Average fell by 93 points, representing a 0.2% drop, while the Nasdaq Composite saw minor gains.

Market Overview

The yield on the 2-year Treasury note increased to 3.58%, while the 10-year yield climbed to 4.15%. Traders are preparing for the Federal Open Market Committee’s two-day meeting, which begins on Tuesday. Current estimates indicate an 87.4% likelihood that the Fed will implement a quarter-point interest rate cut on Wednesday.

Expert Insights

Chris Larkin, managing director for trading and investing at E*TRADE, noted that while a rate cut is uncertain, recent economic data shows continued softness in the labor market alongside persistent inflation. This has led to an optimistic outlook among investors. The response of Fed Chair Jerome Powell during the press conference may significantly influence short-term market reactions.

Economic Projections

The upcoming Summary of Economic Projections (SEP) will provide additional insights into the Fed’s outlook. Previously, the SEP forecasted just one rate cut in 2026, potentially lowering the target rate to between 3.25% and 3.50%. Nicholas Colas, co-founder of DataTrek Research, believes that the new projections may indicate two cuts of 25 basis points, which aligns better with market expectations.

Upcoming Earnings Reports

Investors are also bracing for earnings reports from major companies such as Oracle, Broadcom, Adobe, and Costco Wholesale this week. Oracle and Broadcom are significant players in the artificial intelligence sector, making their performance particularly noteworthy amid recent concerns regarding AI stocks. Additionally, IBM’s announcement of its $11 billion acquisition of Confluent is expected to support the market, especially for AI-related companies.