U.S. stocks were creeping higher at midday, after moving between modest gains and losses, as investors awaited the outcome of this week’s Federal Reserve meeting.
What’s happening
-
The Dow Jones Industrial Average
DJIA
was 84 points, or 0.2%, at 34,702. -
The S&P 500
SPX
gained 13 points, or 0.3%, to 4,463. -
The Nasdaq Composite
COMP
added 38 points, or 0.2%, to trade at 13,745.
The Dow rose 0.1% last week, while the S&P 500 lost 0.2% and the technology-heavy Nasdaq declined 0.4%. The S&P 500 and Nasdaq each booked a back-to-back weekly loss.
What’s driving markets
Stocks were struggling for direction as investors looked toward a busy week of central-bank action.
The S&P 500 dropped 1.2% on Friday after recent stronger-than-expected economic news alongside rising oil prices raised concerns that inflation may stay stubbornly above the Federal Reserve’s 2% target.
“In our view, with inflation still well above the Fed’s 2% target, another rate increase is certainly more likely to occur before any rate cuts, despite the fondest wishes of the markets. That said, our base case calls for a pause in the current hiking cycle by the end of 2023, after which we expect rates to remain elevated but stable in 2024,” Saira Malik, chief investment officer at Nuveen, said in a note.
U.S. crude-oil futures
CL.1,
traded above $91 a barrel, the most expensive since last November, stoking worries about the potential inflationary impact as well as a drag on growth.
Clues to how central banks view these developments will be provided this week. The Federal Reserve will deliver its policy decision midweek, followed by the Bank of England on Thursday and the Bank of Japan Friday (local times).
Read: U.S. economy is trending in the Fed’s direction, so expect Powell to tread carefully next week
“The Fed decision on Wednesday is fully expected to result in a no-change decision, but crucially, the accompanying comments should give something of an insight into its current thinking,” said Richard Hunter, head of markets at Interactive Investor.
“With investors currently split on the outlook over the next year, the latest thoughts from the Fed could well prove to be market moving,” Hunter added.
See: Powell could still hammer U.S. stocks on Wednesday even if the Fed doesn’t hike interest rates
The stocks of the Big Three automakers — General Motors Co.
GM,
Ford Motor Co.
F,
and Chrysler owner Stellantis NV
STLA,
— were lower Monday, as workers continued their strike for higher pay and other benefits. The strike started early Friday after the carmakers failed to reach an agreement with the United Auto Workers.
Live blog: UAW set to resume talks with Ford, GM, Stellantis
Home builder confidence fell in September to the lowest level in five months as buyer demand waned on the back of persistently high mortgage rates. The National Association of Home Builders said its monthly confidence index fell 5 points in September to 45.
Companies in focus
-
U.S.-listed shares of chip-design company ARM Holdings PLC.
ARM,
-8.16%
were down 6% after last week’s successful trading debut. Arm began trading Thursday and closed Friday at $60.75, 19% above their $51 IPO price. “While expectations that Arm will be a beneficiary from AI growth may be adding a premium to the share price, we believe it is too soon to declare them an AI winner,” Bernstein’s Sara Russo said in a Monday note to clients. -
Shares of DoorDash Inc.
DASH,
+2.82%
rose 2.6% after Mizuho upgraded the stock to buy. -
Clorox Co.
CLX,
-0.36%
shares were off 0.7% after the cleaning and household products said a cybersecurity attack identified last month will have a “material” impact on fiscal first-quarter results.
Read the full article here