U.S. stocks edged higher Monday, adding to recent gains ahead of the conclusion of this week’s Federal Reserve policy meeting.
At 09:35 ET (13:35 GMT), the Dow Jones Industrial Average gained 45 points, or 0.1%, the S&P 500 index rose 23 points, or 0.4%, and the NASDAQ Composite climbed 130 points, or 0.6%.
The three main Wall Street indices all reached record highs last week, driven by growing market confidence in an impending Fed rate cut.
Expected Fed cut in spotlight
The Fed will be in the spotlight this week, as markets are now all but certain that the central bank will cut interest rates at the end of its latest two-day gathering on Wednesday.
Underpinned by signs of a softening U.S. labor market, policymakers are widely anticipated to back the first rate cut since an easing cycle was paused in December. Bringing down rates can, in theory, help spur investment and hiring.
Data released earlier Monday also showed a deterioration in the NY Empire manufacturing index, dropping to -8.7 in September from 11.90 the prior month.
However, a reduction can risk pushing up inflationary pressures at the same time. Last week, a monthly U.S. consumer price index reading accelerated slightly due to an uptick in housing and food costs, a potential indication of sticky inflation.
Yet a separate gauge displaying a rise in weekly initial jobless claims likely kept a Fed rate cut on track.
There is now a roughly 95% probability that borrowing costs are lowered by 25 basis points, as well as about a 5% chance of a deeper half-point drawdown, according to CME’s FedWatch Tool. The Fed’s target rate currently stands at a range of 4.25% to 4.5%.
Investors also await the Fed’s updated projections and Chair Jerome Powell’s remarks for clues on the path of monetary policy through the end of the year.
Nvidia faces Chinese antitrust probe
Renewed optimism around artificial intelligence had added support to equities last week.
Oracle Corporation (NYSE:ORCL) shares surged after the company lifted its cloud infrastructure revenue forecast and announced new large-scale AI contracts, helping drive a rally across technology stocks.
The news reinforced hopes that corporate investment in AI will continue to fuel growth in the sector.
That said, Nvidia (NASDAQ:NVDA) stock fell after China’s market regulator said it will extend its antitrust probe into the U.S. chipmaker after finding preliminary evidence the company breached the country’s competition law.
Elsewhere, U.S. Treasury Secretary Scott Bessent said that a framework for a deal on TikTok had been reached in trade talks with the Chinese in Madrid, that would pave the way for a switch to US ownership.
Tesla (NASDAQ:TSLA) stock soared after CEO Elon Musk purchased over 2.5 million shares in the electric vehicle manufacturer, according to a filing with the US Securities & Exchange Commission.
Crude extends recent gains
Oil prices rose, extending recent gains on the back of potential disruptions in Russian supply following Ukrainian drone attacks on Moscow’s energy infrastructure.
At 09:35 ET, Brent futures climbed 0.6% to $67.42 a barrel, and U.S. West Texas Intermediate crude futures rose 0.8% to $63.20 a barrel.
Both contracts gained more than 1% last week as Ukraine stepped up attacks on Russian oil infrastructure, including the largest oil exporting terminal Primorsk and the Kirishinefteorgsintez refinery, one of the two largest refineries in Russia.
The strikes have the potential to take large amounts of Russian oil production offline, and could herald potential supply disruptions, especially for Moscow’s top markets India and China.
Source :
https://www.investing.com/news/stock-market-news/wall-st-futures-steady-after-weekly-gains-fed-rate-decision-looms-4237861
