U.S. Stocks Continue To Experience Choppy Trading

After showing a lack of direction early in the session, stocks continue to turn in a lackluster performance in afternoon trading on Monday. The major averages are 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 Dow is up 102.92 points or 0.3 percent at 36,350.79 and the S&P 500 is up 9.57 points or 0.2 percent at 4,613.94, while the Nasdaq is down 0.08 points or less than a tenth of a percent at 14,403.19.

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.

“Markets are very bullish in pricing in four interest rate cuts next year, the first likely coming in May, something the FOMC is unlikely to line up behind,” said Craig Erlam, OANDA Senior Market Analyst, UK & EMEA.

He added, “The question is how much of a change we’ll see from the September projections and to what extent the committee will push back against the markets.”

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

Most of the major sectors continue to show only modest moves on the day, although substantial strength remains visible among semiconductor stocks.

Reflecting the strength in the sector, the Philadelphia Semiconductor Index has spiked by 3.3 percent to its best intraday level in almost two years.

Networking stocks have also shown a significant move to the upside, driving the NYSE Arca Networking Index up by 2.4 percent.

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 1.7 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 turned in a mixed performance on the day. While the U.K.’s FTSE 100 Index edged down by 0.1 percent, the German DAX Index crept up by 0.2 percent and the French CAC 40 Index rose 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 2.9 basis points at 4.274 percent.

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