U.S. stocks experienced a mixed performance on Monday morning as investors eagerly awaited comments from Federal Reserve Chair Jerome Powell. The central bank had recently made a decision on interest rates, prompting anticipation for further insights from Powell. At 10:58 ET (14:58 GMT), the Dow Jones Industrial Average had risen by 20 points or 0.1%, the S&P 500 had increased by 0.1%, and the NASDAQ Composite had declined by 0.05%.
Last week, the Dow Jones Industrial Average managed a small increase, while both the broad-based S&P 500 and the tech-heavy Nasdaq Composite slipped for the second consecutive week.
This week, the focus is on the latest policy-setting meeting by the U.S. Federal Reserve, which is expected to dominate market activity. The two-day meeting is scheduled to conclude on Wednesday. It is widely anticipated that the central bank will maintain interest rates at a range of 5.25% to 5.50%. Investors will be more interested in the policymakers’ hints regarding their plans for borrowing costs for the rest of the year. Powell’s remarks during his press conference on Wednesday afternoon may provide some clues on the Fed’s direction.
Last week, data showed that consumer prices in August recorded the biggest jump in 14 months, primarily due to higher fuel costs. However, the underlying figure, which excludes volatile items, decelerated to its slowest rate in almost two years.
Analysts at ING noted that the Fed’s decision will likely be interpreted as part of its process of slowing down the pace of rate hikes rather than an actual pause. While inflation is moderating, it remains at a relatively high level. With a tight job market and solid economic activity, the Fed cannot afford to take any chances.
Investors are also monitoring the NAHB housing index, which came in at 45, lower than the expected 50. Additionally, progress in lawmakers’ talks to avoid another U.S. government shutdown is being closely watched.
Instacart, a delivery platform, is expected to price its initial public offering shares tonight. It seeks a valuation of approximately $9.6 billion and is set to start trading in New York as early as Tuesday. This IPO will test investor appetite following last week’s success of chip designer Arm Holdings ADR (NASDAQ: ARM).
Clorox’s (NYSE: CLX) shares dipped by 1% as the company warned that a cyberattack in August had caused production disruptions, potentially impacting its first-quarter financials.
Meanwhile, negotiators representing General Motors (NYSE: GM), Ford (NYSE: F), and Stellantis (NYSE: STLA) are set to resume talks with the United Auto Workers union. This comes as they seek to end one of the most debilitating strikes of recent times. The strikes have halted production at three plants, affecting the Ford Bronco, Jeep Wrangler, Chevrolet Colorado, and other popular models. The union initially requested pay raises of about 40%, while automakers offered raises closer to 20%.
In the oil market, prices continued to rise on Monday due to expectations of a tighter market. This comes ahead of a series of central bank policy-setting meetings taking place this week. Crude benchmarks have surged by over 30% in the past three months following supply cuts from Saudi Arabia and Russia. Consequently, the market could face a significant deficit in the fourth quarter.
Traders are also closely monitoring central bank decisions and commentary, including those from the U.S. Federal Reserve, regarding interest rate policies. Additionally, key economic data from China.