Written by Sruthi Shankar and Shristi Achar A
(Reuters) – U.S. stock indexes on Monday fell below last week's rate as investors said the U.S. Federal Reserve is more likely to cut interest rates this year after Friday's weaker-than-expected jobs report. Expanded the rise.
The benchmark S&P 500 fell after Friday's data showed that U.S. job growth in April was slower than expected and that pressure from the U.S. central bank to keep interest rates steady for an extended period of time has eased. The tech-heavy Nasdaq is trading at a three-week high.
“The economic news was just on point, with signs of underlying strength in the economy still emerging and earnings growth continuing,” said Mark Ruschini, chief investment strategist at Janney Montgomery Scott in Philadelphia. “This should foster an environment in which stock prices can rise.” .
“At the same time, the situation has not deteriorated enough to threaten the Fed's current stance again.”
Traders are currently pricing in a 46 basis point rate cut by the Fed by the end of 2024, with the first rate cut expected in September or November, according to LSEG's interest rate probability app.
In recent weeks, traders had priced in just one rate cut, citing signs of continued inflation. However, better-than-expected first-quarter results and hopes of easing U.S. monetary policy brought buyers back into the market, and U.S. stock indexes stabilized somewhat after a turbulent April.
The Fed signaled last week that it is leaning toward ultimately lowering borrowing costs, but it wants “more confidence” that inflation will continue to fall before cutting rates.
Richmond Fed President Thomas Barkin and New York Fed President John Williams are scheduled to speak later in the day, kicking off a slew of U.S. central bank policy officials speaking this week.
With earnings season in full swing, investors will also be keeping an eye on the quarterly results of major companies like Walt Disney Co., Uber Inc. and Arm Holdings Inc. this week.
Of the 397 S&P 500 companies that reported results through Friday, 76.8% beat analysts' earnings expectations, higher than the long-term average of 66.7%, according to LSEG data.
As of 11:23 a.m. ET, the Dow Jones Industrial Average rose 57.20 points, or 0.15%, to 38,732.88, the S&P 500 rose 29.54 points, or 0.58%, to 5,157.33, and the Nasdaq Composite Index rose 108.37 points, or 0.67%. ) rose to 16,264.70. .
Nine of the S&P 500's 11 sectors rose. The energy index rose 1.3%, supported by rising oil prices. [O/R]
Chipmakers also rose, with Micron Technology rising 4.2% after news that Baird had raised its stock price.
Paramount Global added 3.1% after the media company ended exclusive negotiations with Skydance Media without a deal and a special committee allowed it to accept other offers from rival bidders.
Tyson Foods fell 7.5% as the company's second-quarter profit beat Wall Street expectations but warned that consumers were under pressure from persistent inflation.
Advancing issues outnumbered declining issues by a 3.55-to-1 ratio on the New York Stock Exchange and 1.85-to-1 on the Nasdaq.
The S&P 500 posted 26 new highs and no new lows in 52 weeks. Meanwhile, the Nasdaq recorded 110 new highs and 29 new lows.
(Reporting by Sruthi Shankar and Shristi Achar A in Bengaluru; Editing by Shounak Dasgupta and Shingini Ganguli)
