The S&P 500 moved little and the Nasdaq fell Monday, at the start of a busy week that includes the Federal Reserve policy meeting and U.S. inflation data, which will test investors’ optimism about easing monetary policy in the next year.
Positive sentiment around stabilizing interest rates and strong corporate balance sheets saw stocks rise towards the end of the year, with the benchmark S&P 500 index hitting its highest intraday level of the year.
The S&P 500 and Nasdaq also posted their highest close since the start of 2022 on Friday, after data showed that U.S. job opportunities outside of the agriculture sector were stronger than expected, bolstering expectations that the world’s largest economy can control inflation without going into recession.
Attention now turns to Tuesday’s consumer price index data, which is expected to show that headline inflation remained unchanged in November, and the Fed’s final interest rate decision for the year on Wednesday.
“Investors are thinking about how long this advance will last and whether it is the start of a new bull run,” said Sam Stovall, chief investment strategist at CFRA Research.
While money markets have almost fully priced in a pause in interest rate hikes at the next meeting, bets on a cut next year are more current, with traders seeing a 39% chance of a cut of at least 25 basis points . in March 2024 and a 71.4% chance in May, according to CME Group’s FedWatch tool.
At 12:52 pm (Brasilia time), the Dow Jones index rose 0.25%, to 36,339.19 points, while the S&P 500 index gained 0.05%, to 4,606.68 points. The Nasdaq Composite technology index fell 0.26% to 14,366.56 points.
Source: Terra
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