Major US stock indexes ended slightly lower on Monday as Wall Street awaits updates on inflation and how American consumers feel about the economy.
The S&P 500 was down 0.2%. The benchmark index was coming off a holiday-shortened week in the US and its fourth straight week of gains. The Dow Jones Industrial Average also closed 0.2% lower, while the Nasdaq Composite fell 0.1%.
Overall, the S&P 500 fell 8.91 points to 4,550.43. The Dow fell 56.68 points to 35,333.47 and the Nasdaq lost 9.83 points to 14,241.02.
Healthcare, communication services and industrial stocks were among the biggest drags on the market. Eli Lilly & Co. fell 1.6%, Meta Platforms fell 1% and Union Pacific closed 2% lower.
Technology stocks and companies dependent on consumer spending were bright spots. Chipmaker Nvidia rose 1% and Amazon.com gained 0.7%.
Shopify climbed 4.4% after the cloud-based commerce company announced a Black Friday record of $4.1 billion in global sales from its merchants.
In the bond market, Treasury yields fell across the board. The yield on the 10-year Treasury note, which influences interest rates on mortgages and other loans, fell to 4.39% from 4.47% late Friday. The yield on the 2-year Treasury note fell to 4.88% from 4.95%.
Stocks in Asia and Europe closed mostly lower.
Investors are cautiously optimistic that inflation has cooled enough for the Federal Reserve to finally end its aggressive rate hikes. Meanwhile, the broader economy has remained strong enough in the face of rising interest rates and inflation to avoid a recession.
Markets have rallied on this sentiment and the S&P 500 remains on track to end November as its best month of the year. Investors will get more economic news this week that could either confirm or dampen this sentiment.
On Tuesday, the Conference Board releases its latest report on consumer confidence, which has remained solid throughout the year. Economists polled by FactSet expect the October report to show another solid reading.
The price of US crude oil fell 0.9% on Monday and was broadly stable ahead of Thursday’s OPEC meeting. The cartel has maintained tight supplies, although prices have fallen over the past month. Lower energy prices could further ease inflationary pressures on consumers and help boost economic growth.
On Thursday, Wall Street will be closely watching the government’s October data on the Federal Reserve’s preferred measure of inflation. Economists expect this measure to continue to ease, as it has been doing since the middle of the year.
Investors have moved on from the latest round of surprisingly strong corporate earnings after several disappointing quarters. The main focus through to the end of the year will be on the Fed and what it does next.
The Fed has kept its benchmark interest rate steady in a range of 5.25% to 5.50% since its last quarter-point hike at its July meeting. Wall Street is betting that the rate will remain steady at the central bank’s December meeting and into early 2024, according to CME’s FedWatch tool.
Investors are increasingly betting that the Fed will cut rates in mid-2024, bringing them down from their highest level in two decades. However, the central bank has said it will base future decisions on the latest economic reports in its ongoing efforts to cool inflation without slowing economic growth enough to cause a recession.
