While the S&P 500 remained largely stable, the Nasdaq experienced a decline on Monday, hampered by a downturn in technology shares as investors assessed the potential for a larger interest rate cut from the Federal Reserve this week.
The S&P technology index (.SPLRCT), opens new tab, which has been the top performer among the 11 major S&P sectors this year, fell approximately 1% as the session’s leading laggard.
Apple (AAPL.O), opens new tab saw a decrease of nearly 3%, significantly impacting both the benchmark S&P index and Nasdaq Composite after a TF International Securities analyst indicated that demand for its new iPhone 16 models was below expectations.
Concerns over demand also affected semiconductor manufacturers, with Nvidia (NVDA.O), opens new tab, the top performer of the S&P 500 this year, slipping almost 2%, Broadcom (AVGO.O), opens new tab decreasing 2.2%, and Micron Tech (MU.O), opens new tab dropping nearly 5%, contributing to a 1.6% decline in the Philadelphia SE Semiconductor index (.SOX), opens new tab.
“If individuals want to quickly increase their liquidity, how can they do that? They turn to selling stocks that they can liquidate rapidly without significantly affecting the market. So, you can quickly sell Apple, Nvidia, Amazon, or Microsoft and generate considerable cash,” remarked Ken Polcari, chief market strategist at SlateStone Wealth in Jupiter, Florida.
“They are looking to do this prior to the Fed’s announcement in case there’s a shift in sentiment or to ensure they have cash ready for potential opportunities.”
The Dow Jones Industrial Average (.DJI), opens new tab increased by 183.69 points, or 0.45%, to settle at 41,577.47, while the S&P 500 (.SPX), opens new tab enhanced by 3.37 points, or 0.06%, reaching 5,629.39, and the Nasdaq (.IXIC), opens new tab decreased by 98.14 points, or 0.55%, closing at 17,585.83.
Among the 11 S&P 500 sectors, only technology and consumer discretionary stocks (.SPLRCD), opens new tab posted losses for the day, whereas financials (.SPSY), opens new tab, up 1.04%, and energy, up 1%, led the gains.
Since the beginning of the year, markets have surged on hopes that the Fed would begin to ease its monetary policy, coupled with data indicating the economy might sidestep a recession.
The Dow achieved an intraday all-time high and the S&P 500 (.SPX), opens new tab is now within 1% of its record closing high from July.
In recent days, market predictions regarding the magnitude of the rate cut the Federal Reserve will announce on Wednesday have fluctuated significantly, currently suggesting a 59% probability for a 50-basis-point reduction, as per CME’s FedWatch Tool, opens new tab.
Intel Corp (INTC.O), opens new tab surged 4.1% following a report indicating it qualified for up to $3.5 billion in federal grants for semiconductor production for the U.S. Department of Defense.
Boeing (BA.N), opens new tab fell 0.8% after the airline manufacturer announced a hiring freeze and was considering temporary furloughs as its workers’ strike entered its fourth day.
On the NYSE, advancing stocks outnumbered declining ones by a ratio of 2.35-to-1. In contrast, on the Nasdaq, advancing stocks exceeded decliners by a ratio of 1.14-to-1.
The S&P 500 registered 86 new 52-week highs and one new low, while the Nasdaq counted 126 new highs and 72 new lows.
