U.S. stocks showed a modest recovery on Monday, after a significant drop in the previous session, as Wall Street anticipates the Federal Reserve's upcoming decision on interest rates. The S&P 500 , Dow Jones Industrial Average , and Nasdaq Composite all edged higher, with the Dow e-minis up 12 points, or 0.03%, S&P 500 e-minis up 3.5 points, or 0.08%, and Nasdaq 100 e-minis up by 21.75 points, or 0.14% as of 5:29 a.m. ET.
The previous Friday had seen a slump in chipmakers due to concerns of weak demand and bruised mega-cap growth stocks as a result of rising Treasury yields. This led to the S&P 500, Nasdaq, and Dow tumbling between 0.8% and 1.5%, marking their worst single-day fall since August 24.
Traders are almost unanimously expecting the Fed to keep rates unchanged at the range of 5.25% to 5.5% at its meeting on Wednesday. The odds for another pause in November stand at 69%, according to the CME FedWatch Tool.
This expectation comes despite recent hotter-than-expected economic data which has eased recession fears without raising concerns of a September rate hike. However, rising energy prices have emerged as a potential inflation threat, which still remains above the Fed's target of 2%. "Further rate hikes would risk sending the economy into a hard landing scenario," said Thomas Simons, U.S. economist at Jefferies.
Leading investors like Goldman Sachs, J.P. Morgan Asset Management and Janus Henderson Investors anticipate that the central bank will lift its economic growth projections this week but expect rates to have peaked.
In other market news, Micron Technology (NASDAQ: MU ) rebounded 2.4% in premarket trading following Friday's rout, after Deutsche Bank (ETR: DBKGn ) upgraded its rating on the stock to "buy" from "hold". Additionally, Blackstone (NYSE: BX ) Inc and a vacation lodging platform are set to join the S&P 500 ahead of the start of trading. Their stocks were down by 0.5% and 0.1%, respectively.
The Bank of England and Bank of Japan are also due to give their monetary policy decisions this week, adding to the global anticipation of central banks' next moves.
This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.
Add Chart to Comment
We encourage you to use comments to engage with users, share your perspective and ask questions of authors and each other. However, in order to maintain the high level of discourse we’ve all come to value and expect, please keep the following criteria in mind:
- Enrich the conversation
- Stay focused and on track. Only post material that’s relevant to the topic being discussed.
- Be respectful. Even negative opinions can be framed positively and diplomatically.
- Use standard writing style. Include punctuation and upper and lower cases.
- NOTE: Spam and/or promotional messages and links within a comment will be removed
- Avoid profanity, slander or personal attacks directed at an author or another user.
- Don’t Monopolize the Conversation. We appreciate passion and conviction, but we also believe strongly in giving everyone a chance to air their thoughts. Therefore, in addition to civil interaction, we expect commenters to offer their opinions succinctly and thoughtfully, but not so repeatedly that others are annoyed or offended. If we receive complaints about individuals who take over a thread or forum, we reserve the right to ban them from the site, without recourse.
- Only English comments will be allowed.
Perpetrators of spam or abuse will be deleted from the site and prohibited from future registration at Investing.com’s discretion.