Stock Market Volatility Ahead of Key Inflation Data and Fed Meeting
The S&P 500 and the Nasdaq managed to turn higher on Monday, while the Dow remained flat as investors braced themselves for a key inflation reading and the upcoming Federal Reserve meeting. The market uncertainty comes as investors seek clues on the central bank’s policy-easing path.
Despite early declines, the S&P 500 saw gains as companies like Microsoft, Amazon.com, and Broadcom helped lift the Nasdaq slightly higher. Shares of these companies rose between 0.8% and 2.5%.
This week, all eyes are on the Consumer Price Index inflation report for May and the conclusion of the Fed’s two-day policy meeting on Wednesday. The central bank is expected to hold interest rates steady, but investors are eager to see the updated economic and policy projections.
Market expectations for rate cuts in September have fluctuated following Friday’s strong jobs data for May. The odds of a rate reduction now stand at 50%, down from a high of 69% last week. However, concerns remain as unemployment ticked higher and household surveys indicated economic distress.
“We’re probably going to see a little bit of volatility,” said Jason Pride, chief of investment strategy and research at Glenmede. “The employment report already created a ‘choose your own adventure’, and we suspect there may still be a little bit of confusion from the CPI report this week.”
In other market news, chipmaker Nvidia saw a 1.1% rise after a stock split, while financials underperformed, led by a 6.1% loss in regional lender Huntington Bancshares.
At midday, the Dow Jones Industrial Average was down slightly, the S&P 500 was up, and the Nasdaq Composite was also in positive territory. Apple slipped ahead of its annual developer conference, while Southwest Airlines surged after activist investor Elliott Investment Management disclosed a significant position in the company.
Several companies, including CrowdStrike, KKR & Co, and GoDaddy, saw gains after being included in the S&P 500. Diamond Offshore Drilling also rose after a buyout announcement, while GameStop slumped following a share sale announcement.
Overall, declining issues slightly outnumbered advancers on both the NYSE and the Nasdaq. The market saw a mix of new highs and lows, reflecting the ongoing volatility and uncertainty among investors.
