4:09pm: Moderna stock falls after Biden calls pandemic "over"
The Dow finished Monday up 197 points, 0.6%, at 31,020, the Nasdaq Composite added 87 points, 0.8%, to 11,535 and the S&P 500 improved 27 points, 0.7%, to 3,900.
It was an up-and-down session for the benchmarks, but they managed to end a two-day slide a day before the Federal Reserve begins its meetings on Tuesday.
“We’re in a wait-and-see approach and markets are waiting for some kind of bullish or bearish catalyst to send us out of this trading range,” said Adam Sarhan, CEO of 50 Park Investments, as reported by CNBC. “The markets are struggling for direction and that’s the fundamental news.”
Meanwhile, shares of Covid-19 vaccine-maker Moderna Inc fell more than 7% after President Biden said, "The pandemic is over," in an interview with 60 minutes that aired Sunday. Pfizer Inc (NYSE:PFE) stock lost more than 1%.
12.05 pm: Equities seesaw in volatile trading session
US stocks moved lower in noon trading ahead of the Federal Reserve’s two-day policy meeting beginning on Tuesday, with the central bank expecting to raise interest rates by another 75 basis points.
At midday, the Dow lost 48 points to 30,774, while the S&P 500 eased 10 points at 3,863 and the tech-heavy Nasdaq slipped 42 points to 11,406.
“Stocks have climbed off their lows from earlier in the morning, but sentiment is still very gloomy,” Adam Crisafulli of Vital Knowledge wrote in a note to clients.
“The consensus playbook for the week seems to be anticipating a brief rally around the FOMC, which most people plan to use as an opportunity to book profits in preparation for further downside (a return to the June lows is thought by many to be inevitable),” Crisafulli added.
Notable movers included shares of Apple Inc (NASDAQ:AAPL), which rose nearly 1%.
9.35am: Fed meeting in focus
US stocks continued last week’s significant declines on Monday ahead of the high-anticipated Federal Reserve policy meeting later this week where the central bank’s latest interest rate hike decision will be revealed.
A grim pre-earnings statement from FedEx (NYSE:FDX), which saw the stock tumble more than 20% on Friday, has also dampened sentiment among investors by highlighting the continued strain on growth of inflation and tightening monetary policy.
Just after the open, the Dow Jones Industrial Average had shed 236 points or 0.7% at 30,586 points, the S&P had dipped 32 points or 0.8% at 3,842 points, and the Nasdaq Composite had lost 72 points or 0.6% at 11,375 points.
Cryptocurrencies also took a hit, with Bitcoin USD down about 6% at $18,770, Ethereum USD down about 8% at $1,315, and Coinbase dipping about 4% to $71.
6.30am: Wall Street set for fresh falls
US stocks are expected to come under fresh pressure on Monday, extending last week's hefty falls, as investors nervously await this week's Federal Reserve policy meeting.
Futures for the Dow Jones Industrial Average were down 0.6% in pre-market trading, while those for the S&P 500 shed 0.7%, and contracts for the Nasdaq-100 lost 0.9%.
The main US indexes dropped sharply again on Friday, with the S&P 500 notching up its worst week since June after a sales warning from FedEx (NYSE:FDX) Corp added to concerns about inflation, growth and tighter monetary policy.
Analysts at Danske Bank commented: "Inflation fear and recession fears continue to switch gears. On Friday, the latter one took the lead. Positive inflation data combined with FedEx (NYSE:FDX)'s profit warning underlined the shift. Defensives and growth sectors took the lead (such as staples, health care but also tech) while energy, industrials and materials sold off 2%."
Investors now await another expected big rate increase from the US central bank at its September 20-21 policy meeting as higher-than-expected inflation numbers have ramped up bets on the so-called terminal rate, which now stand at 4.45% which is more than 200 basis points higher than the current benchmark overnight interest rate and compares with a projected peak of about 3.7% just a month ago.
Higher US interest rates are potentially unwelcome for stocks, which rallied over the summer, while bond yields retreated from their highs on hopes that the Fed would ease the pace of rate hikes.
Those hopes were dashed this week when the US consumer price index (CPI) for August showed inflation rose 8.3% on an annualised basis, more than economists' forecasts of 8.1%.
The Bank of Japan will also make its latest policy decision this week, although the BoJ is expected to keep itsrates on hold at ultra-low levels.
Shares in the Asia-Pacific fell on Monday ahead of the major central bank meetings this week, with the Hang Seng Tech index dropping 1.9%. The London Stock Exchange is closed for Queen Elizabeth II's funeral on Monday.