US markets saw mixed results on Monday as investors weighed the possibility of the Federal Reserve pausing its interest rate hikes at its upcoming policy meeting. The S&P 500 ended the day lower, declining by 0.20%, while the Nasdaq dropped 0.09% and the Dow Jones Industrial Average slipped 0.59%.
The industrials and energy sectors were hit hardest among the 11 S&P 500 sectors, contributing to the overall decline. Traders and analysts suggested that investors’ concerns about the Fed’s monetary tightening cycle prompted a cautious approach, leading to the speculations of a potential pause in interest rate hikes.
According to market forecasts, there is an 80% chance that the Federal Reserve will hold interest rates steady at its June meeting. However, traders anticipate another rate hike in July, reflecting the central bank’s efforts to combat inflationary pressures in the economy.
Tech giant Apple experienced a mixed day in the market. The company’s stock initially soared to a record high following the unveiling of its Vision Pro augmented-reality headset. However, by the end of the trading day, Apple’s stock closed 0.8% lower.
Another prominent tech player, Nvidia, saw its stock dip by 0.4% on Monday. Meanwhile, electric vehicle manufacturer Tesla enjoyed a 1.7% increase in its stock price. The rise was attributed to strong sales of China-made cars in May, signaling positive momentum for the company.
In broader market developments, the S&P 500 reached its highest level in over nine months. This surge was primarily driven by encouraging news on the wage growth front. With wage growth moderating in May, investors perceived a potential alleviation of inflationary pressures.
Furthermore, expectations of a pause in the Federal Reserve’s monetary tightening cycle, coupled with robust corporate earnings, have contributed to the S&P 500’s impressive 20% increase since October.
Meanwhile, a recent survey revealed weak growth in the US. This survey underscores the challenges faced by the economy, despite the positive momentum seen in the stock market. Experts suggest that continued attention to economic indicators will be crucial in determining the future trajectory of the markets.
As investors eagerly await the Federal Reserve’s decision on interest rates, market participants remain vigilant, taking into account both domestic economic indicators and global factors that may influence the central bank’s policy stance.