Wall Street wavers after rally

14 Nov, 2023

NEW YORK: The main US stock indexes were mixed on Monday as investors awaited a crucial inflation reading this week that could shape expectations around how long the Federal Reserve will keep interest rates elevated.

The cautious mood followed a strong session on Wall Street on Friday, when a rally in megacap stocks lifted the tech-heavy Nasdaq to a two-month peak and the benchmark S&P 500 to a near eight-week closing high.

Investors will focus on a slew of economic data and speeches from Fed officials this week for clues on the trajectory of US interest rates amid growing expectations that the Fed is done hiking borrowing costs.

Data on Tuesday is expected to show headline consumer prices eased to 3.3% in October from 3.7% in September. However, core prices are seen unchanged from the previous month.

“The concern is that if you get hot CPI data, that puts the prospect of Fed raising rates at the next meeting back on the table,” said Michael James, managing director of equity trading at Wedbush Securities in Los Angeles.

“Given the healthy slate of retail earnings that we have this week, along with the CPI data tomorrow, there’s clearly risk to the rally’s strength.” The major US stock indexes have rebounded strongly this month, fueled by a stronger-than-expected earnings season and hopes that US interest rates are near their peak.

Traders have priced in a nearly 86% chance that the Fed will hold interest rates in December, according to the CME Group’s FedWatch tool.

Adding to jitters on Monday, Moody’s lowered its outlook on the US credit rating to “negative” from “stable”, citing large fiscal deficits and a decline in debt affordability.

US House of Representatives Speaker Mike Johnson unveiled a Republican stopgap spending measure on Saturday aimed at averting a government shutdown on Friday, but the measure quickly ran into opposition from lawmakers from both parties in Congress.

At 12:12 p.m. ET, the Dow Jones Industrial Average was up 81.50 points, or 0.24%, at 34,364.60, the S&P 500 was down 1.13 points, or 0.03%, at 4,414.11, and the Nasdaq Composite was down 28.99 points, or 0.21%, at 13,769.12.

Helping keep the Dow afloat, Boeing climbed 4.6% after Bloomberg News reported that China is considering resuming purchases of 737 Max aircraft.

Meanwhile, Dubai’s Emirates placed an order for 90 more Boeing 777X jets at the opening of the Dubai Airshow on Monday.

Medtech companies such as Dexcom, Abbott and Insulet rose between 1.9% and 6.9% as analysts said data for cardiovascular benefits for Novo Nordisk’s weight-loss drug Wegovy is better than feared for the companies.

Advancing issues outnumbered decliners by a 1.12-to-1 ratio on the NYSE. Declining issues outnumbered advancers for a 1.05-to-1 ratio on the Nasdaq.

The S&P index recorded 22 new 52-week highs and seven new lows, while the Nasdaq recorded 41 new highs and 182 new lows.

Read Comments