4:15pm: Apple shares rise on Goldman rating but Nasdaq closes in the red
The Dow closed Monday up 40 points, 0.1%, at 33,431, while the Nasdaq Composite lost 13 points, 0.1%, to 11,676 and the S&P 500 added 3 points, less than 0.1%, to 4,048. The small-cap Russell 2000 Index tumbled 29 points, 1.5%, to 1,899.
The DJIA finished higher, albeit barely, for the fourth session in a row.
Apple shares added nearly 2% after Goldman Sachs initiated coverage with a 'Buy' rating, buying the S&P 500. Investors are looking ahead to Federal Reserve chair Jerome Powell’s congressional testimony on Tuesday and Wednesday. The market headed toward the flatline in the afternoon, perhaps not wanting to get ahead of itself, as suggested by LPL Financial’s Quincy Krosby.
“It’s prudent for the market not to get ahead of itself given that it’s an important week that can change the direction,” Krosby said, as reported by CNBC.
Meanwhile, FOREX.com market analyst Matt Weller said that Fed chair Jerome Powell is expected to signal that interest rates may need to be raised more than previously anticipated in light of recent economic data.
12:05pm: 50bps hike should be on the table, some Fed officials suggest
US stocks continued to gain traction at midday ahead of several market-moving events this week, including Federal Reserve chair Jerome Powell’s congressional testimony on Tuesday and Wednesday.
Just after noon, the Dow Jones Industrial Average had added 125 points or 0.4% at 33,516 points, the S&P 500 was up 26 points or 0.7% at 4,072 points, and the Nasdaq Composite had gained 115 points or 1% at 11,804 points.
FOREX.com market analyst Matt Weller said that Fed chair Powell is expected to signal that interest rates may need to be raised more than previously anticipated in light of recent economic data.
“Powell's remarks will be closely watched by investors, as any hawkish signals he sends could lead to market volatility,” he said.
Weller noted that, while the majority of policymakers are signalling that the central bank should continue raising rates in more measured 25 basis point increments, some officials and Fed watchers have suggested a 50 basis point move should be on the table if inflation fails to slow.
“San Francisco Fed President Mary Daly, for example, has stated that further policy tightening, maintained for a longer time, will likely be necessary to put the current episode of high inflation behind us,” he said.
9:40am: 10-year US Treasury yield fall to 3.91%
US stocks edged higher at the open on Monday ahead of congressional testimony Tuesday and Wednesday from Federal Reserve Chair Jerome Powell as the benchmark Treasury yield continues to fall.
Just after the market opened, the Dow Jones Industrial Average rose 89 points to 33,480, while the S&P 500 added 14 points at 4,059 and the tech-heavy Nasdaq Composite gained 59 points to 11,748.
Notable stock movers included shares of Apple Inc, which rose more than 2% after Goldman Sachs initiated coverage of the consumer electronics giant with a ‘Buy’ rating and a price target of $199.
“If you’re afraid of a recession, go get the 10-year Treasury,” Sri-Kumar Global’s Sri Kumar said.
“Equities are a losing proposition today, and until you see the valuations come down significantly, just don’t trust [Friday’s] rally,” he added.
6:30am: Markets marking time
Wall Street is expected to open flat at the start of a new week as investors look to comments from Federal Reserve Chair Jerome Powell for more clues on the Fed’s next step ahead of a key employment report on Friday.
Futures for the Dow Jones Industrial Average (DJIA) were unchanged in Monday pre-market trading, while those for the broader S&P 500 index were marginally higher and contracts for the Nasdaq-100 rose 0.1%.
The main US indices ended higher on Friday following a volatile week as the market digested economic data that pointed to a resilient economy. The DJIA snapped a four-week losing streak to close 1.2% up at 33,391, while the Nasdaq Composite rallied 2% to 11,689 and the S&P 500 jumped 1.6% to 4,046.
“Fed Chair Jerome Powell will give his semi-annual report on monetary policy to Congress on Tuesday and the Senate on Wednesday, markets expect that the Fed Chair will likely stick to the well-worn script regarding progress in the inflation battle but that Fed remain data dependent and as such it is too early to declare victory," TickMill Group market analyst Patrick Munnelly said. "Whilst nascent signs of disinflation are developing, the broader inflation picture remains challenging and well above the 2% mandated target."
Apart from Powell’s comments this week, Friday looms large as the latest non-farm payrolls report falls due, commented Richard Hunter, head of markets at interactive investor.
“Last month’s report rattled investors with a breathtaking addition of 517000 jobs, and a further reduction to the unemployment rate, suggesting that the labour market is starting to show signs of immunity from the hiking cycle. However, expectations for February are more modest, with a consensus for 225000 jobs to have been added, while investors will also have an eye on any revisions to the previous bumper reading,” Hunter noted.