Traders work on the floor at the New York Stock Exchange on Sept. 9, 2024.
The S&P 500 ticked higher Monday as investors awaited the Federal Reserve's highly anticipated policy meeting, during which central bankers are expected to cut rates for the first time since 2020. Meanwhile, the Dow Jones Industrial Average rose to a new all-time high.
The S&P 500 added 0.13%, ending at 5,633.09. The 30-stock Dow advanced 228.30 points, or 0.55%, ending at 41,622.08, notching a record close. Meanwhile, the tech-heavy Nasdaq Composite shed 0.52%, falling to 17,592.13.
Apple shares declined 2.8% after analysts at firms, including Bank of America and JPMorgan, noted that shipping times could point to lighter demand for iPhone 16 Pro models than the prior year.
Chip stocks such as Nvidia, which led the market comeback last week, were lower as investors took off some of their bets. The artificial intelligence giant lost nearly 2% Monday. Broadcom and KLA Corporation each fell 2%, while Marvell Technology slid 1.5%.
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The S&P 500 stands less than 1% away from its July record and could notch a new all-time high this week. After a rough start to a historically weak September, the three major U.S. indexes ended last week's trading session in the green, with the S&P 500 and Nasdaq just closing their best week of 2024.
The Fed is set to meet Tuesday and Wednesday and is widely anticipated to lower rates for the first time since it began its hiking cycle in March 2022. A cut this week would be a pivotal move, as many investors hope the decision could lower borrowing costs for companies and improve overall earnings growth.
The overnight lending rate now stands at 5.25% to 5.5%. The market is currently pricing in a 63% possibility that the central bank will cut rates by 50 basis points, per the CME Group's FedWatch Tool that measures fed funds futures data.
Money Report
The financial and energy sectors added more than 1% Monday, outperforming the broader market, while information technology slipped nearly 1% in the largest sector loss of the day.
Many investors are "profit-taking" on Big Tech's gains over the past year, particularly semiconductor stocks, said Christopher Barto, senior investment analyst at Fort Pitt Capital.
Investors are seeing "not necessarily a full rotation of market leadership; but other areas of the market are starting to perk up, and a lot of that has to do with the future rate cuts that are coming into play," said Barto.
S&P 500, Dow close positive Monday
The S&P 500 and Dow Jones Industrial Average ended Monday's trading session in the green.
The broad market index added 0.13% to close at 5,633.09. The 30-stock Dow advanced 228.3 points, or 0.55%, to finish at 41,622.08. Meanwhile, the Nasdaq Composite fell 0.52% to end the session at 17,592.13.
— Hakyung Kim
Oil stocks rise Monday
Shares of oil companies climbed higher on Monday as the broader energy sector outperformed the market. APA and Marathon Oil both added 2%.
ConocoPhillips and EOG Resources gained 1.9% and 1.8%, respectively.
— Hakyung Kim
CNBC Pro: Apple is no longer a ‘growth engine’ for investors
Apple is no longer the growth company it once was despite still being a great income generator, according to New York University's Aswath Damodaran.
"Apple has returned more than $600 billion in cash over the last decade, which makes it the greatest cash machine in history," Damodaran told CNBC's "The Exchange" on Monday. "So I like the company as a cash machine, but not as a growth engine."
CNBC Pro subscribers can read the full story here.
— Sarah Min
Amazon tells employees to return in person five days a week
Amazon on Monday told employees to return to in-person work five days a week next year, barring any "extenuating circumstances" or exceptions.
"Before the pandemic, it was not a given that folks could work remotely two days a week, and that will also be true moving forward — our expectation is that people will be in the office outside of extenuating circumstances," CEO Andy Jassy wrote in a memo.
Shares were last down less than 1%.
— Samantha Subin
Hedge funds bought financials at the fastest pace since June 2023, Goldman says
Hedge funds flocked back into financial stocks last week after selling the sector in the past seven of eight weeks, according to Goldman Sachs prime brokerage data.
Financials were the most net bought sector last week, driven by almost entirely long buys, and it was the largest buying activity since June 2023, the data said.
The buying came after some of the big banks suffered significant sell-offs. JPMorgan shares dropped nearly 4% last week after the biggest bank in the country tempered its guidance on interest income and expenses.
— Yun Li
Fed rate cuts weighing on dollar outlook, says strategist
Wall Street is leaning toward the Federal Reserve cutting rates by 50 basis points at its meeting this week. Although markets want to see a deeper rate cut versus the central bank just lowering rates by 25 basis points, a larger initial cut could spark some alarm and affect the dollar, according to Quincy Krosby, chief global strategist for LPL Financial.
"Any hint of an emergency propelling their thinking would have the dollar weakening at a faster clip against global peers, while a rationale based on inflation easing at a pace that suggests keeping rates significantly higher is no longer warranted should keep the dollar from falling decisively further," Krosby said.
— Hakyung Kim
Stocks making the biggest moves in midday trading
Some stocks making the biggest moves midday:
- Nuvalent — Shares soared more than 22%, hitting an all-time high, after the biopharmaceutical company highlighted positive data on two experimental cancer treatments over the weekend. Nuvalent said the two drugs show "favorable tolerability."
- Bausch + Lomb — The contact lens provider rallied 13.9% after the Financial Times reported it was considering a sale. Bausch + Lomb is working with Goldman Sachs advisors and is expected to catch the eye of private equity, according to the Financial Times.
- Alcoa — The aluminum stock jumped more than 7% after the company agreed to sell its stake in the Ma'aden joint venture. Alcoa said it will sell its full 25.1% ownership for about $1.1 billion.
Read here for the full list.
— Sean Conlon
Intel leads Dow gains
Shares of chipmaker Intel jumped 3.6% Monday, making it the 30-stock Dow Jones Industrial Average's top outperformer.
Merck and Travelers Companies also advanced around 2% each, helping to prop up the Dow on Monday while the other major averages slipped into the red.
Meanwhile, Apple's 3% sell-off on reports of sluggish demand for the new iPhone 16 pared back some of the Dow's gains.
— Hakyung Kim
Larger rate cut could lead to dollar volatility, says analyst
Amid speculation whether the Federal Reserve will lower interest rates by 25 or 50 basis points during its
Federal Open Market Committee meeting this week, a foreign exchange analyst notes that a larger cut could bode negatively for the stock market and the dollar.
"Historically, when the Fed has started the rate cut cycle with a larger 0.5% cut, it has preceded some awful returns in equity markets. The latest instance was in 2007, which preceded the 2008 financial crisis, and before that, the tech bubble market rout in the early 2000s," said Joe Tuckey, head of FX analysis at Argentex.
A larger rate cut could imply worries about economic strength and growth ahead, he added.
"This can have ramifications for the dollar, which can often be supported in times of stress. The larger cut may well drive the dollar to new lows for this move, while a 0.25% cut would likely initiate far less currency volatility," Tuckey said.
— Hakyung Kim
Tech leads losses, financials outperform
Information technology slipped 1.2% Monday, pulling down the S&P 500.
Apple's 3% fall, along with declines in the broader semiconductor industry, weighed upon the sector.
Meanwhile, financials rose around 1%, making it the best-performing sector for the day. Energy also added 0.9%.
— Hakyung Kim
Boeing slumps 1% as company implements hiring freeze
Boeing shares slipped more than 1% after the aircraft maker announced a hiring freeze as it implements cost cuts and grapples with a factory worker strike.
The company also said it will pause nonessential travel and trim supplier spending and halt purchase orders for 737 Max, 767 and 777 jetliners.
Shares have slumped more than 40% this year.
— Samantha Subin
Semiconductor stocks struggle
Chip stocks took a hit to begin the new trading week as investors appeared to pull back on some artificial intelligence bets.
The VanEck Semiconductor ETF (SMH) and iShares Semiconductor ETF (SOXX) both slid nearly 2% in morning trading. By comparison, the broad S&P 500 was slightly below its flatline for the session.
Artificial intelligence darling Nvidia also slipped around 2%, weighing on the broader industry. Elsewhere, Micron dropped about 4% following a price target cut by Morgan Stanley.
— Alex Harring
Oil services stocks outperform
Oil services stocks were outperforming Monday.
The VanEck Oil Services ETF (OIH) rose 1.8% in midday trading, on pace for its third straight day of gains, as well as its best day going back to Aug. 23.
Shares of Transocean, ProPetro, Noble and Oceaneering were among the leading advancers in the exchange-traded fund, up 3% or more, each.
Those moves come as oil prices neared session highs. U.S. crude futures for October hit a high of 70.42, or its best level since Sept. 5 when it rose to 70.82.
— Sarah Min, Gina Francolla
Uber-Tesla partnership is possible down the line, Morgan Stanley says
Uber's recent expansion of its partnership with Waymo could be a prelude to a similar deal with Tesla down the line, according to Morgan Stanley.
Analyst Brian Nowak said in a note to clients that autonomous vehicle companies will likely look to partner with ride-share partners such as Uber to help commercialize the business.
"Our modeling of the Tesla mobility business begins with an 'in-house' initial offering from the Tesla app at small scale in specific metros/geos. … However, we believe the liquidity and ubiquity of the Uber platform may offer significant win-win potential for Uber and Tesla over time," the note said.
Tesla has a robotaxi event day scheduled for Oct. 10.
— Jesse Pound
S&P 500 opens little changed
The S&P 500 began Monday's session near the flatline.
The broad market index traded less than 0.1% lower. Meanwhile, the Dow Jones Industrial Average added 187 points, or 0.5%. The tech-heavy Nasdaq Composite dropped 0.8%.
— Hakyung Kim
See the stocks moving before the bell
These are some of the stocks making moves in Monday's premarket trading:
- Upstart Holdings — The personal finance stock fell more than 4% after announcing a $300 million debt offering.
- Bausch + Lomb — The contact lens provider jumped 11.5% after the Financial Times reported the company was exploring a sale.
- Alcoa — The aluminum company popped 1.4% following its announcement of the sale of its stake in the Ma'aden mining joint venture.
— Alex Harring
New York manufacturing indicator shows surprise positive move
Manufacturing activity in the New York area turned positive in September for the first time since November, according to a Federal Reserve survey released Monday.
The New York Fed's Empire State Manufacturing Survey posted a reading of 11.5, representing the difference in companies reporting expansion against contraction. That was up -4.7 in August and much better than the -5 estimate from the Dow Jones consensus.
New orders, shipments, unfilled orders and inventories all shot higher. The prices paid and received indexes edged lower while the employment index rose slightly but was still negative.
— Jeff Cox
Dollar reaches July 2023 low against the yen
The dollar slipped 0.7% to 139.56 yen on Monday. That marked the greenback's weakest level against the yen since July 28, 2023, when the dollar traded as low as 138.05 yen.
Other currencies also strengthened against the dollar as it continued to soften ahead of rate cut expectations later this week.
The Euro hit a high of 1.1128 versus the greenback, the highest level since Sept. 6, when the euro traded as high as 1.1155 against the dollar. The Pound sterling also strengthened to 1.3203 dollar, the highest level since Sept. 6 when the sterling traded as high as 1.3238 versus the dollar.
— Hakyung Kim, Gina Francolla
Apple falls 2% on soft demand concerns for Pro models
Apple shares declined more than 2% before the bell amid concerns that early iPhone shipping data could suggest soft demand for iPhone 16 Pro models.
Early lead time data showed in-line demand for the iPhone 16 base, but a slower start for Pro models relative to the iPhone 15, noted JPMorgan's Samik Chatterjee.
Bank of America's Wamsi Mohan also noted that shipping times look slower compared to last year for the Pro models.
"Supply and pricing could be affecting lead times," he wrote. "Though the extension of ship dates can be reflective of iPhone demand, other factors such as supply, inventory, allocation and pricing could be impacting the ship dates."
— Samantha Subin
Wall Street coming off a strong week
The major averages posted strong gains last week despite big intraday swings:
- The Dow jumped 2.6% last week, marking its fourth weekly gain in five weeks.
- The S&P 500 popped 4%, its biggest one-week gain since November.
- The Nasdaq jumped nearly 6%, its best weekly performance since November.
— Fred Imbert
Europe markets open lower
European stocks opened lower Monday as investors prepared for a bumper week of interest rate decisions from the U.S Federal Reserve and the Bank of England.
The pan-European Stoxx 600 was down 0.21% in opening trade, with all major bourses and the vast majority of sectors in the red. Mining stocks shed 0.65%, while autos were 0.58% lower.
— Karen Gilchrist
Stock futures open little changed
Shortly after 6 p.m. ET on Sunday, S&P 500 futures hovered below the flatline, while futures tied to the Dow Jones Industrial Average added 3 points, or just above flat. Nasdaq 100 futures edged lower by nearly 0.1%.
— Pia Singh
