Traders work on the floor of the New York Stock Exchange (NYSE) in New York, U.S., September 9, 2024.
Brendan McDermid | Reuters
The S&P 500 fell Monday as investors awaited the Federal Reserve’s highly anticipated policy meeting, where central bankers are expected to cut rates for the first time since 2020. A decline from the tech giant Apple weighed on the market.
THE S&P 500 traded 0.2% lower, while the Nasdaq Composite Index lost 1.1%. Dow Jones Industrial Average outperformed, increasing by 237 points, or 0.6%.
Apple Shares fell more than 3% after analysts at companies including Bank of America and JPMorgan noted that shipping delays could indicate weaker demand for the iPhone 16 Pro models than a year earlier.
Chipmakers were also down on the day, with AI giant Nvidia down 3%. UCK and Broutecom also lost nearly 3%, while ASML Holding Company lost 1.8%.
The S&P 500 is less than 1% from its July record high and could hit a new all-time high this week. After a rough start to September, all three major U.S. indices ended last week’s trading session in the green, with the S&P 500 and Nasdaq just wrapping up their best weeks of 2024.
The Fed is scheduled to meet Tuesday and Wednesday and is expected to make its first interest rate cut since it began raising rates in March 2022. A cut this week would be a pivotal move, as many investors hope the decision could lower corporate borrowing costs and improve overall earnings growth, boosting economic growth.
The overnight lending rate is currently between 5.25% and 5.5%. Fed funds futures indicate a 63% chance the central bank will cut rates by 50 basis points, according to CME Group’s FedWatch tool.
Stocks typically post strong gains during cycles where initial rate cuts are able to support economic expansion, said Brian Belski, chief investment strategist at BMO Capital.
“As long as nothing breaks in the economy, US stocks remain firmly in a bull market, but with significantly strong one-year performance heading into this first rate cut, future gains are likely to be more muted by historical standards, in our view,” he said in a note ahead of Friday.
