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 less than 0.1% higher. The tech-heavy Nasdaq Composite shed 0.5%. Meanwhile, the 30-stock Dow outperformed, jumping 246 points, or 0.6%.
Apple shares declined more than 2% 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 around 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.
The financial and energy sector added 0.9% Monday, outperforming the broader market while information technology slipped 0.7% in the largest sector losses of the day.
Many investors are “profit-taking” on big tech’s gains over the past year, particularly semiconductor stocks, said Christopher Barto, senior investment analyst at Fort Pitt Capital.
Investors are seeing “not necessarily a full rotation of market leadership; but other areas of the market are starting to perk up, and a lot of that has to do with the future rate cuts that are coming into play,” said Barto said.
Oil services stocks outperform
Oil services stocks were outperforming Monday.
The VanEck Oil Services ETF (OIH) rose 1.8% in midday trading, on pace for its third straight day of gains, as well as its best day going back to Aug. 23.
Shares of Transocean, ProPetro, Noble and Oceaneering were among the leading advancers in the ETF, up 3% or more, each.
Those moves come as oil prices neared session highs. U.S. crude futures for October hit a high of 70.42, or its best level since Sept. 5 when it rose to 70.82.
VanEck Oil Services ETF (OIH)
— Sarah Min, Gina Francolla
Uber-Tesla partnership is possible down the line, Morgan Stanley says
Uber‘s recent expansion of its partnership with Waymo could be a prelude to a similar deal with Tesla down the line, according to Morgan Stanley.
Analyst Brian Nowak said in a note to clients that autonomous vehicle companies will likely look to partner with rideshare partners like Uber to help commercialize the business.
“Our modeling of the Tesla mobility business begins with an ‘in-house’ initial offering from the Tesla app at small scale in specific metros/geos. … However, we believe the liquidity and ubiquity of the Uber platform may offer significant win-win potential for Uber and Tesla over time,” the note said.
Tesla has a robotaxi event day scheduled for Oct. 10.
—Jesse Pound
S&P 500 opens little changed
The S&P 500 began Monday’s session near the flatline.
The broad market index traded less than 0.1% lower. Meanwhile, the Dow Jones Industrial Average added 187 points, or 0.5%. The tech-heavy Nasdaq Composite dropped 0.8%.
— Hakyung Kim
See the stocks moving before the bell
New York manufacturing indicator shows surprise positive move
A worker examines a piece of curved glass at Flickinger Glassworks in the Brooklyn borough of New York, US, on Thursday, June 6, 2024.
Stephanie Keith | Bloomberg | Getty Images
Manufacturing activity in the New York area turned positive in September for the first time since November, according to a Federal Reserve survey released Monday.
The New York Fed’s Empire State Manufacturing Survey posted a reading of 11.5, representing the difference in companies reporting expansion against contraction. That was up -4.7 in August and much better than the -5 estimate from the Dow Jones consensus.
New orders, shipments, unfilled orders and inventories all shot higher. The prices paid and received indexes edged lower while the employment index rose slightly but was still negative.
—Jeff Cox
Dollar reaches July 2023 low against the yen
The dollar slipped 0.7% to 139.56 yen on Monday. The marked the greenback’s weakest level against the yen since July 28, 2023 when the dollar traded as low as 138.05 yen.
Other currencies also strengthened against the dollar as it continued to soften ahead of rate cut expectations later this week.
The Euro hit a high of 1.1128 versus the greenback, the highest level since September 6, when the euro traded as high as 1.1155 against the dollar. The Pound sterling also strengthened to 1.3203 dollar, the highest level since September 6th when the sterling traded as high as 1.3238 versus the dollar.
— Hakyung Kim, Gina Francolla
Apple falls 2% on soft demand concerns for Pro models
Apple shares declined more than 2% before the bell amid concerns that early iPhone shipping data could suggest soft demand for iPhone 16 Pro models.
Early lead time data showed in-line demand for iPhone 16 base, but a slower start for Pro models relative to the iPhone 15, noted JPMorgan’s Samik Chatterjee.
Bank of America’s Wamsi Mohan also noted that shipping times look slower compared to last year for the Pro models.
“Supply and pricing could be affecting lead times,” he wrote. “Though the extension of ship dates can be reflective of iPhone demand, other factors such as supply, inventory, allocation and pricing could be impacting the ship dates.”
— Samantha Subin
Wall Street coming off a strong week
The major averages posted strong gains last week despite big intraday swings:
- The Dow jumped 2.6% last week, marking its fourth weekly gain in five weeks.
- The S&P 500 popped 4%, its biggest one-week gain since November.
- The Nasdaq jumped nearly 6%, its best weekly performance since November.
— Fred Imbert
Europe markets open lower
Bank of England Governor Andrew Bailey addresses the media during the central bank’s Monetary Policy Report press conference at the Bank of England, in London, Britain, on February 1, 2024.
Justin Tallis | Reuters
European stocks opened lower Monday as investors prepared for a bumper week of interest rate decisions from the U.S Federal Reserve and the Bank of England.
The pan-European Stoxx 600 was down 0.21% in opening trade, with all major bourses and the vast majority of sectors in the red. Mining stocks shed 0.65%, while autos were 0.58% lower.
European markets
— Karen Gilchrist
