Indexes Finish Higher Ahead of Inflation Data, Fed Meeting
Stocks closed Monday higher, with investors continuing their recent preference for more modestly sized companies over the tech behemoths that had powered this year’s rally. Read the day’s full markets roundup here.
The signs of rotation within the market came as investors looked ahead to Tuesday’s consumer-price index report and Wednesday’s interest-rate decision. Investors widely expect Chair Jerome Powell and his colleagues to hold interest rates steady on Wednesday, reflecting cooling inflation.
Traders trimmed bets that the Fed will cut rates as soon as March following Friday’s stronger-than-expected jobs report. Still, a reduction by this time next year is seen as a near certainty, CME group data show.
Fed forecasts due Wednesday will show most officials themselves expect to cut rates in 2024, reports Nick Timiraos.
Stocks firmed up gains after wavering earlier in the session. All three major U.S. indexes rose, led by the Dow; they ended last week at their highest levels in more than a year and a half.
Cigna stock jumped after the company scrapped a tie-up with Humana. Macy’s surged after The Wall Street Journal reported that an investor group has made an offer to take the company private. That lifted department-store chains Kohl’s and Nordstrom as well.
Large tech shares slumped. All of the “Magnificent 7” stocks moved lower, with Meta Platforms dropping some 2%. While Nvidia fell, some other chip stocks rose.
Treasury yields ticked lower, reversing earlier gains, after a $37 billion auction of 10-year notes received decent demand from investors. The 10-year yield settled at 4.238%, down from 4.29% earlier in the session.
Japanese stocks rallied and the yen fell against the dollar after Bloomberg News reported the Bank of Japan is unlikely to end negative rates this month. Hong Kong’s Hang Seng Index fell after deflationary data in China suggested Beijing’s efforts to reignite faltering growth are falling short.
