Chuck Mikolajczak
NEW YORK (Reuters) – The Dow fell on Monday, the first session since the index’s biggest weekly percentage gain this year, as investors weighed the likely path of Federal Reserve interest rates ahead of key inflation data due later in the week. this year. shortened week on holidays.
Last week, the Fed maintained its forecast for three interest rate cuts this year, the S&P 500 and Dow posted strong gains while the Nasdaq posted its biggest weekly percentage gain since mid-January.
Chicago Fed President Austan Goolsbee said Monday that he has planned three rate cuts this year, and Fed Governor Lisa Cook said the central bank needs to tread carefully as it decides when to start cutting interest rates.
“This is a breather, the market is holding up very well, so people are waiting, a lot of people are waiting for this pullback,” said Joe Saluzzi, partner, co-founder and co-head of equity trading at Themis Trading in Chatham. New Jersey.
“What the Fed has done is everything is clear at the moment, it’s really interesting what they are doing. They don’t cut anything but just keep putting it off and the market is happy with that…but they are doing a good job. now the job is to save the bullets for when they need them.”
The S&P 500 fell 162.13 points, or 0.41%, to 39,313.77, the S&P 500 lost 15.97 points, or 0.31%, to 5,218.21 and the index lost 44.35 points. , or 0.27%, to 16,384.47.
Economic data showed that sales of new single-family homes in the United States fell unexpectedly in February after mortgage rates rose during the month. The underlying trend remained strong with a chronic shortage of previously owned homes on the market.
The Nasdaq held virtually unchanged for most of the session before gradually falling as gains in chip makers Nvidia (NASDAQ:) and Micron Technology (NASDAQ:) provided support. Nvidia shares rose 0.76%, while Micron Technology shares rose 6.28% to a record close of $117.04. Semiconductor stocks faltered, showing initial weakness after a report over the weekend that China had introduced guidelines to phase out U.S. microprocessors supplied by Intel (NASDAQ:) and AMD (NASDAQ:) from state-owned personal computers and servers.
The Philadelphia Semiconductor Index closed 0.34% lower after alternating gains and losses throughout the session. Intel shares closed down 1.74% and AMD shares closed down 0.57%.
Expectations for a Fed rate cut in June have risen again, with markets now pricing the likelihood of a rate cut of at least 25 basis points (bps) at 71.9%, according to CME’s FedWatch Tool, up from 54.7% a week ago.
February personal consumption price index (PCE) data, the Fed’s preferred inflation gauge, is due out on Friday, when US markets will be closed for the Good Friday holiday.
Good performance could shake market expectations regarding the timing of rate cuts.
Boeing (NYSE:) shares rose 1.36% after announcing a major leadership shakeup and saying CEO Dave Calhoun would step down from his role at the end of 2024. But the aircraft maker broke through session highs.
Walt Disney (NYSE:) rose 3.01% as the Dow’s top performer after Barclays upgraded the stock to outperform from equal weight.
On the New York Stock Exchange, decliners outnumbered advancers by a ratio of 1.4 to 1. On the Nasdaq, decliners outnumbered advancers by about 1.4 to 1.
The S&P 500 posted 31 new 52-week highs and 2 new lows, while the Nasdaq posted 113 new highs and 110 new lows.
Volume on U.S. exchanges was 9.67 billion shares, compared with the full-session average of 12.27 billion over the past 20 trading days.