Stocks were mixed on Monday as investors considered the path of interest rates next year after the Fed hinted they would stay higher for longer.
The S&P 500 (^GSPC) fell 0.2% while the tech-heavy Nasdaq (^IXIC) erased early session gains to hug the flatline. The Dow Jones Industrial Average (^DJI) dropped more than 250 points, or 0.6%.
Wall Street is coming off an upbeat Friday but a downbeat — and volatile — week, with all three major averages up above 1% Friday but down around 2% for the week. The Fed is playing the part of the Grinch, signaling that it would step back its pace of cutting next year, leading stocks to one of the worst days of the year on Wednesday.
On Friday, however, the Fed’s preferred inflation gauge, the Personal Consumption Expenditures index, showed further cooling on the inflation front — if still some stickiness. Still, the lone dissenter of the Fed’s move to cut last week said she voted against cutting rates because “there is more work to do on inflation.”
For now, according to the CME FedWatch tool, investors are betting on the Fed holding rates steady next month. For its subsequent meeting in March, bets are about 50-50 on a cut vs. a hold.
But this week’s light schedule will provide a bit of a breather and a chance for Wall Street to digest and reflect heading into 2025. Markets will close at 1 p.m. ET on Tuesday, followed by Wednesday’s Christmas holiday.
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Consumer Confidence expectations fell in December to 104.7, versus estimates for 113.2.
The reading came in below all 47 estimates, which ranged from 109.3 to 116.00 across 47 estimates, according to Bloomberg data.
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Stock mixed to kick off shortened holiday week
Stocks opened mixed to kick off a short trading week as investors assess how the Federal Reserve will handle its interest rate policy next year.
The S&P 500 (^GSPC) rose slightly while the tech-heavy Nasdaq (^IXIC) gained 0.1%. The Dow Jones Industrial Average (^DJI) fell about 0.4%.
Consumer Discretionary stocks (XLY) gained while Financials (XLF) and Real Estate (XLRE) lagged in early trading.
Individual movers included AI heavyweight Nvidia (NVDA) and Tesla (TSLA), up more than 1% and 2%, respectively.
Wall Street is coming off a volatile a volatile week after Fed chair Jerome Powell hinted the central bank will scale back its pace of interest rate cuts next year.
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