U.S. Stocks Turning In Lackluster Performance As Fed Meeting Looms

Stocks are turning in a lackluster performance during trading on Monday, with the major averages showing only modest moves on the day after ending last Friday’s session at their best closing levels in well over a year.

Currently, the major averages are narrowly mixed. While the Nasdaq is down 50.45 points or 0.4 percent at 14,353.52, the Dow is up 54.03 points or 0.2 percent at 36,301.90 and the S&P 500 is up 0.41 points or less than a tenth of a percent at 4,604.78.

The choppy trading on Wall Street comes as traders seem reluctant to make significant moves ahead of the Federal Reserve’s monetary policy announcement on Wednesday.

With the Fed widely expected to leave interest rates unchanged, traders are likely to focus more closely on the central bank’s accompanying statement and projections.

Reports on consumer and producer price inflation are also likely to attract attention in the coming days along with reports on retail sales and industrial production.

Optimism the Fed could pivot to cutting interest rates as soon as March 2024 has contributed to recent strength on Wall Street, although last Friday’s strong than expected jobs data has led to speculation the Fed could wait until May to begin lowering rates.

Among individual stocks, chares of Macy’s (M) are sharply higher following reports an investor group consisting of Arkhouse Management and Brigade Capital has offered to acquire the department store chain for $5.8 billion.

Health insurer Cigna (CI) has also surged after reportedly abandoning efforts to acquire rival Humana (HUM) and announcing a $10 billion increase in its share repurchase authorization.

Sector News

While most of the major sectors are showing only modest moves on the day, semiconductor stocks have surged, driving the Philadelphia Semiconductor Index up by 2.5 percent to its best intraday level in almost two years.

Significant strength is also visible among networking stocks, as reflected by the 1.7 percent gain being posted by the NYSE Arca Networking Index.

Meanwhile, gold stocks are seeing considerable weakness amid a decrease by the price of the precious metal, dragging the NYSE Arca Gold Bugs Index down by 1.9 percent.

Airline stocks have also shown a notable move to the downside, with the NYSE Arca Airline Index falling by 1.2 percent

Other Markets

In overseas trading, stock markets across the Asia-Pacific region moved mostly higher during trading on Monday. Japan’s Nikkei 225 Index jumped by 1.5 percent and China’s Shanghai Composite Index climbed by 0.7 percent, although Hong Kong’s Hang Seng Index bucked the uptrend and slid by 0.8 percent.

Meanwhile, the major European markets are turning in a mixed performance on the day. While the U.K.’s FTSE 100 Index is down by 0.1 percent, the German DAX Index is up by 0.1 percent and the French CAC 40 Index is up by 0.3 percent.

In the bond market, treasuries are seeing further downside following the steep drop seen last Friday. As a result, the yield on the benchmark ten-year note, which moves opposite of its price, is up by 2.5 basis points at 4.270 percent.

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