The Dow Jones Industrial Average achieved a remarkable milestone, closing at an all-time high of 41,622.1 on Monday, as traders keenly awaited the Federal Reserve's forthcoming monetary policy announcement. This notable increase represents a rise of 0.6%, while the S&P 500 also experienced a modest uptick of 0.1%, reaching 5,633.1.
However, the Nasdaq Composite faced a decline of 0.5%, settling at 17,592.1. The financial and energy sectors led the market gains, proving resilient amidst broader fluctuations, whereas technology and consumer discretionary sectors faced downturns. As the financial landscape shifts, the Federal Open Market Committee is set to convene for a two-day meeting beginning Tuesday, with market participants eager for clarity on its benchmark lending rate, which will be announced on Wednesday.
Current insights from the CME FedWatch tool indicate a 65% likelihood of a 50 basis point cut in interest rates, while a 25 basis point reduction remains a viable scenario. Analysts from prominent financial institutions, including Goldman Sachs, Oxford Economics, and Oppenheimer Asset Management, have expressed expectations for a quarter-percentage-point rate cut.
Oppenheimer highlighted in a Monday note to clients that, "The state of the economy is good enough to avoid a larger than (25-basis-point) cut that might suggest to businesses, consumers, and some market participants that the economy is in trouble—or at or near recession." Corporate developments also made waves, with shares of Intel ($INTC) rising sharply by 6.4%, making it the top performer across all three major benchmark indexes.
This surge was fueled by the chipmaker's announcement of receiving up to $3 billion in U.S. government funding. Contrastingly, Apple ($AAPL) shares saw a decline of 2.8%, marking the steepest drop on the Dow and among the worst performers on the Nasdaq, following reports indicating that demand for the recently launched iPhone 16 has not met expectations. Micron Technology ($MU) also faced challenges, registering a notable decline of 4.4% as Morgan Stanley recalibrated its price target for the stock, adjusting it downward from $140 to $100 while maintaining an equal weight rating. In the commodities arena, West Texas Intermediate crude oil experienced a notable increase of 2.6%, closing at $70.46 per barrel.
This price jump comes amidst reports of significant crude oil and natural gas production being offline in the Gulf of Mexico, a lingering effect of Hurricane Francine, as noted by D.A. Davidson in a Monday report. From an economic perspective, the New York Federal Reserve reported a positive shift, revealing that manufacturing activity saw its first growth this month since November, bolstered by substantial increases in orders and shipments. In the precious metals market, gold prices remained relatively steady at $2,610.60 per troy ounce, while silver experienced a slight rise of 0.1%, moving to $31.12 per ounce..