Optimism on Wall Street
U.S. stocks closed higher on Monday with the S&P 500 up +0.47%, Nasdaq 100 up +0.84%, and Dow Jones rising +0.11%. Futures also finished in positive territory, pushing both the S&P 500 and Nasdaq to fresh all-time highs. Falling Treasury yields supported equities, with the 10-year note yield slipping to 4.04%.
Focus on the Fed
The Federal Reserve’s September 17–18 meeting is the central event of the week. Markets are fully pricing in a 25 bp rate cut and only a 5% chance of a 50 bp move. Traders expect a total of 68 bp of cuts by year-end, bringing the federal funds rate down to 3.65% from the current 4.33%.
Weak Data Adds Pressure
Despite the rally, U.S. macro data disappointed. The Empire State manufacturing index plunged to -8.7, far below expectations of +5. This reinforced the case for monetary easing.
China’s Weakness Weighs
China added uncertainty with August industrial output (+5.2% y/y) and retail sales (+3.4% y/y) missing forecasts. The jobless rate climbed to 5.3%, while new home prices fell for the 27th straight month. On top of that, Beijing launched an anti-dumping probe into Texas Instruments and accused Nvidia of violating antitrust rules over its Mellanox acquisition.
Stock Movers
Tech giants and chipmakers fueled Monday’s advance. Alphabet surged +4% after a price target upgrade, Tesla jumped +3% following Musk’s $1B stock purchase, and Amazon, Microsoft, and Apple all rose more than +1%. Semiconductor names also rallied, led by ASML (+6%) and Intel (+3%). Seagate soared +7% and Western Digital gained +4% after analyst upgrades.
On the downside, Corteva dropped -5% amid breakup concerns, Texas Instruments lost -2% on China news, while Builders FirstSource and AstraZeneca fell after downgrades.
Markets remain at record highs, balanced between weak economic data and trade risks on one side, and Fed rate cut expectations on the other. All eyes are now on Wednesday, when Jerome Powell announces the Fed’s decision and outlines the path forward.
Subscribe to stay up to date with the latest events in the financial markets.
Telegram: @bigstakeinvest
Twitter: @BigStakeTrades
Telegram: @bigstakeinvest
Twitter: @BigStakeTrades