Traders work on the floor of the New York Stock Exchange on September 4, 2024.
Brendan McDiarmid | Reuters
the Standard & Poor's 500 Gold fell after hitting a record high on Tuesday as the market awaited the Federal Reserve's decision on whether to cut interest rates.
The broad market index was down 0.1% at 5,627, after earlier touching a new record high of 5,670.81. Nasdaq Composite It rose by 0.1%, and Dow Jones Industrial Average The Dow Jones Industrial Average fell 40 points, or 0.1%. The 30-stock Dow Jones Industrial Average also hit an all-time high.
S&P 500 Index in 2024
The S&P 500’s move to an all-time high earlier in the session comes during a historically difficult period for the market. September was the benchmark’s worst month in the past 10 years, with an average monthly loss of 1.3%, according to FactSet data.
Traders also overcame late-summer headwinds caused by concerns about the health of the U.S. economy. Disappointing August jobs and manufacturing data sparked a one-day selloff. However, stocks were able to recover on more constructive data and expectations of a Federal Reserve rate cut.
Wall Street is looking ahead to the Federal Reserve’s long-awaited interest rate cut on Wednesday afternoon, a move that could help boost corporate earnings growth amid a backdrop of high borrowing costs and high inflation. The Fed began its aggressive rate hike campaign in March 2022.
The latest retail sales data pointed to strong consumer health. Retail sales rose 0.1% in August, versus economists’ estimates of a 0.2% decline, according to the Dow Jones Industrial Average. Excluding autos, the figure also came in at a 0.1% increase, slightly below the consensus forecast of 0.2%.
While investors are anticipating a rate cut on Wednesday, the market is divided on the likely size of the cut. Traders are currently pricing in a 59% chance that the central bank will ease rates by 50 basis points, according to the CME Group’s Fed Watch tool. That’s up from about 47% on Friday but slightly lower than the 67% previously expected on Tuesday. A basis point is equal to 0.01%.
Some investors said a sharp rate cut could raise concerns about the health of the economy.
“A 50bp rate cut would signal a downward revision of the Fed’s view on the labor market — which would be a more worrisome signal,” said Adam Turnquist, chief technical strategist at LPL Financial. “I think there’s a big divergence between what the market expects and what the Fed might predict.”
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