U.S. stocks exhibited a mixed performance on Monday afternoon as investors approached the Federal Reserve’s impending monetary policy announcement with caution. The consensus is that the Fed will reduce interest rates, although there is ongoing debate regarding the magnitude of the cut.
According to CME Group's FedWatch Tool, there is currently a 65% probability of a 50 basis point rate cut and a 35% probability of a 25 basis point rate cut. Regardless of whether the Fed opts for a 25 or 50 basis point reduction, it is anticipated that interest rates will continue to decrease throughout the rest of the year.
As for the major indices, the Dow is notably advancing into positive territory, the Nasdaq is experiencing a moderate decline, and the S&P 500 remains virtually unchanged.
As of the latest figures, the Dow stands at 41,578.82, up by 185.04 points or 0.45%. The Nasdaq has dropped by 119.89 points, or 0.68%, to 17,564.09, while the S&P 500 shows a slight gain at 5,626.23.
Among notable decliners are Apple Inc., Nvidia Corp, Starbucks Corporation, Broadcom Inc., and Tesla. On the upside, Charles Schwab, Nike, Goldman Sachs, Union Pacific Corporation, AT&T, Morgan Stanley, Walt Disney Corporation, Pfizer, Wells Fargo, Blackstone, GE Aerospace, IBM, Cisco Systems, Linde Plc, T-Mobile, Merck, and Bank of America have all risen by 1% to 3%.
Economically, the Federal Reserve Bank of New York has reported that regional manufacturing saw growth in September for the first time in nearly a year. The general business conditions index surged to 11.5 in September from -4.7 in August, with a positive reading signifying expansion. This exceeded economists’ expectations, which had projected a slight improvement to -3.9.
The significant rise in the headline index can be partly attributed to a notable rebound in new orders, as the new orders index jumped to 9.4 in September from -7.9 in August.
