- The Federal Reserve Week begins on Tuesday.
- The Dow Jones Industrial Average finished 197.26 points higher.
- The S&P 500 improved 0.69%, as Nasdaq Composite jumped 0.76%.
In a choppy trading session on Monday, stocks ended higher ahead of the Federal Reserve’s two-day policy meeting, which is scheduled to begin on Tuesday.
Closing at 31,019.68, the Dow Jones Industrial Average increased 197.26 points or 0.64%. The Nasdaq Composite increased 0.76% to close at 11,535.02 while the S&P 500 increased 0.69% to 3,899.89.
Early in the day, the 30-stock index dropped as much as 263 points, and throughout the session, stock prices alternated between gains and losses. At session lows, the S&P 500 and Nasdaq both decreased by more than 0.9%.
Yields increased in anticipation of the Fed’s likely decision to raise its benchmark rate by an additional 75 basis points later this week in an effort to curb inflation. The 10-year Treasury yield rose to its highest level in 11 years, exceeding 3.51%.
Investors have been selling stocks once more out of concern that the Fed will tighten monetary policy too much and send the economy into a recession. This comes after a brief period of optimism over the summer that the Fed may be finished with its aggressive tightening campaign.
Investor attention is focused on the Fed’s policy meeting, which will start on Tuesday and during which the institution is anticipated to increase interest rates by an additional 75 basis points. Prior to the start of the upcoming reporting season in October, investors are also keeping an eye out for corporate earnings guidance.
There is a wait-and-see approach as the investor markets are struggling for direction and that’s the fundamental news.
The day ended positively for nine of the S&P 500’s eleven sectors, with industrials, consumer discretionary, and materials leading the way. As some investors wagered that higher rates might boost their bottom lines, the financial sector also increased.
The healthcare industry lagged behind, declining after President Joe Biden’s remarks that the pandemic is over.
Stocks dropped last week as a result of investors’ reactions to an inflation report that was hotter than anticipated and a depressing FedEx warning about a “significantly worsened” global economy. In five weeks, the major averages recorded their fourth weekly loss.
Beyond the crucial Fed meeting, there are a few economic data releases this week, such as August housing starts on Tuesday and initial jobless claims on Thursday.
As the price of bitcoin dropped to its lowest point since June and traders continued to unwind short positions after the Ethereum merger was completed, shares of the cryptocurrency exchange dropped more than 7%. In anticipation of the Fed decision this week, stocks also declined on Monday.
Following President Joe Biden’s declaration that the Covid-19 pandemic is over in an interview with CBS’ “60 Minutes” on Sunday, shares of Moderna and Novavax fell more than 7% each on Monday. BioNTech lost 8.4%, while Pfizer’s stock fell 1.3%.
As a result of being named a top pick by Cowen, shares of SunOpta increased by more than 5%. Buy-rated analysts believe that the company’s agnostic stance and capital execution are providing strong growth sightlines that are being underappreciated by the market.
After Piper Sandler upgraded Array Technologies from neutral to overweight, saying the company has more upside due to an improved forward outlook, the solar stock increased by more than 3%.
The luxury clothing and home goods maker gained nearly 2% after an investor update indicated high single-digit sales growth.
After a data and media company reported that the iBuyer lost money on 42% of its August resales, Opendoor fell 6%. The company, like others in the housing industry, is facing challenges like a housing recession and mortgage rates over 6%.
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