- Dow, S&P and Nasdaq eke out wins
- Interest rates expected to remain unchanged on Wednesday
- Oil price extends recent gains
4:21pm: Investors look ahead to Fed meeting
The Dow closed Monday up 6 points, less than 0.1%, at 34,624, the Nasdaq Composite ticked up 2 points to 13,710 and the S&P 500 improved 3 points to 4,534. The small-cap Russell 2000 index lost 13 points, 0.7%, to 1,834.
Apple shares added 1.7% as Morgan Stanley (NYSE:MS) and Goldman Sachs (NYSE:GS) each issued positive outlooks for iPhone 15 demand.
Meanwhile, investors are looking ahead to the Federal Reserve meeting this week, which is expected to end without interest rate changes.
“There are some question marks: Everyone knows that they’re going to stay put for this meeting, but then what is their messaging going to be going forward?,” said Stephanie Lang, CIO at Homrich Berg. “It’s a wait-and-see moment to see what kind of forward guidance we’re getting from the Fed.”
12:00pm: US stocks rise after subdued start
US stocks climbed after a cautious start as investors look ahead to Wednesday's interest rate decision.
At midday, the Dow Jones Industrial Average was up 89.45 points, 0.3%, at 34,707.69, the S&P 500 was up 12.41 points, 0.3%, at 4,462.73 and the Nasdaq Composite was up 28.05 points, 0.2%, at 13,736.39.
The rise in oil prices helped energy stocks. The energy sector of the S&P 500 advanced around 1%, led by Marathon Petroleum and Valero.
But Wednesday's rate call remains the dominat theme.
Traders are assigning a 99% chance that the Fed stays put when it releases its rate decision on Wednesday and just a 31% probability of a hike in November, according to the CME Group (NASDAQ:CME)’s FedWatch tool, which gauges pricing in the fed funds futures market.
Moderna shares tumbled 8% after it was reported the Pfizer CFO predicted weak demand for Covid vaccines.
CNBC said that speaking at a conference sponsored by JP Morgan Pfizer Chief Financial Officer David Denton said he expects a 24% vaccination rate in the US.
“Keep in mind the flu is probably closer to a 50% vaccination rate, so we haircut that pretty significantly for the year. We will see how that plays out as we look at the trends in the in the coming weeks in the US and globally from that perspective,” Denton was reported to have said.
9:40am: Stocks tread water ahead of rate call
The Dow edged higher, while the Nasdaq was little changed as investors took a cautious view ahead of Wednesday's interest rate decision by the Federal Reserve.
Shortly after the opening bell, the Dow Jones Industrial Average was up 29.92 points, 0.1%, at 34,648.16, the S&P 500 was little changed at 4,451.74 and the Nasdaq Composite was up 6.40 points, 0.05%, at 13,714.74.
The moves came as traders prepare for an interest rate decisions by the Fed on Wednesday when the US central bank is expected to keep its target range unchanged at between 5.25% and 5.5%.
“Further rate hikes would risk sending the economy into a hard-landing scenario,” said Thomas Simons, senior US economist at Jefferies. “Instead, the Fed can look to a strategy of maintaining current policy rates for a long time.”
Car-makers General Motors Company, Ford Motor Company (NYSE:F) and Stellantis NV were in focus after talks resumed over the weekend with the UAW union.
GM stock was slightly lower, down 0.6%, Ford slipped 1.6% and Chrysler and Dodge parent Stellantis was 1.7% lower.
Oil prices edged higher as investors weighed the prospect of a widening supply deficit in the fourth quarter.
US West Texas Intermediate crude gained more than 1% and hit a high of $91.70, the highest level since November 2022 - so far this quarter, WTI has gained 29.8%, putting it on pace for the first positive quarter in three quarters.
7:00am: US stock futures point to steady progress
US stock futures edged as investors look toward the Federal Reserve’s next policy decision on Wednesday.
In pre-market trading, futures for the Dow Jones Industrial Average were 0.1% higher, while those for the S&P 500 rose 0.1%, and contracts for the Nasdaq 100 futures were up 0.1%.
Chip stocks will be in the spotlight after heavy falls on Friday.
Reuters reported TSMC has told its major suppliers to delay the delivery of high-end chipmaking equipment, as it grows increasingly nervous about customer demand, citing two sources familiar with the matter.
Shares in Nvidia, Applied Materials and Lam Research fell 3.7%, 4.4% and 5.0% respectively. The Philadelphia semiconductor index, tracking 30 of the world’s biggest semiconductor manufacturers, fell 3.0%.
Investors are widely anticipating that the Fed will hold interest rates steady but as always, the language accompanying the decision will be scrutinised to gauge the mood of the central bank going forward.
Goldman Sachs (NYSE:GS) explained Fed officials have signalled that they can afford to proceed carefully at this point and will leave the target range for the funds rate unchanged at 5.25-5.5% at their September meeting.
But the immediate question for markets is whether the median dot will continue to project an additional hike this year to 5.5-5.75%, presumably in November.
“We think that it will, but only by a narrow majority, and in part for the strategic purpose of preserving flexibility,” the investment bank said.
But Goldman believes that the FOMC will ultimately decide in November that it has made enough progress in the inflation fight to leave the funds rate unchanged.