Stock Market Treads Cautiously as Investors Eye Federal Reserve Meeting

　　

Make informed decisions with the most up-to-date and reliable financial data, exclusively provided by vtmarkets.com.

On Monday, the stock market showed subdued performance ahead of the Federal Reserve meeting later in the week. The S&P 500 inched up by 0.07%, the Nasdaq rose by 0.01%, and the Dow Jones gained 0.02%. Investors overwhelmingly expected the Fed to maintain its current policy, but uncertainty loomed about November’s actions, with a 31% chance of a rate hike. Apple’s stock surged by 1.7% on positive outlooks, while Ford, Stellantis, and General Motors faced declines due to ongoing union disputes. The US dollar dipped by 0.2% in anticipation of central bank meetings, and EUR/USD rose by 0.24%. USD/JPY struggled to breach resistance, and Sterling hovered below the 200-DMA. USD/CAD dropped by 0.23%, while AUD/USD and USD/CNH made modest gains. The market awaited crucial data and central bank decisions throughout the week.

Stock Market Updates

In the stock market, Monday saw a relatively flat performance as investors eagerly anticipated the upcoming Federal Reserve meeting later in the week. The S&P 500 made a modest 0.07% gain, closing at 4,453.53, while the Nasdaq Composite edged up by 0.01% to finish at 13,710.24. The Dow Jones Industrial Average also advanced by a slight 0.02%, closing at 34,624.30. Traders are overwhelmingly expecting the Federal Reserve to maintain its current policy during its two-day meeting, with a 99% probability of no change in interest rates, according to the CME Group’s FedWatch tool. However, the market remains uncertain about the Fed’s actions in November, with roughly a 31% chance of a rate hike. Investors are keen to decipher the central bank’s future guidance and messaging for potential insights into its next moves.

In company-specific news, Apple saw a 1.7% increase in its stock price, buoyed by optimistic outlooks from Goldman Sachs and Morgan Stanley regarding new iPhone demand. Conversely, Ford’s stock slid by over 2% as the United Auto Workers’ strike persisted, while Stellantis and General Motors, also embroiled in disputes with the union, saw their stocks decline by over 1%. The previous trading week ended with the S&P 500 and Nasdaq posting losses for the second consecutive week, while the Dow managed a slight 0.1% gain, setting the stage for a week of anticipation and cautious observation as market participants await the Federal Reserve’s decisions and guidance.

Data by Bloomberg

On Monday, across all sectors, there was a slight increase of 0.07% in the market. The sectors that saw gains were led by Energy, with a 0.68% increase, followed by Information Technology at 0.47%, Financials at 0.32%, and Communication Services at 0.27%. However, there were declines in other sectors, with the largest decreases occurring in Consumer Discretionary, which dropped by 1.01%, and Real Estate, which saw a decline of 0.81%. Other sectors that saw declines were Materials at -0.43%, Health Care at -0.18%, and Utilities at -0.05%. Industrials and Consumer Staples had smaller gains of 0.11% and 0.08%, respectively.

Currency Market Updates

In the midst of various global economic factors, the US dollar faced a 0.2% decline on Monday as it encountered significant resistance and EUR/USD found support. This decline occurred in anticipation of upcoming meetings by central banks, including the Fed, BoE, and BoJ. The day saw limited US economic data, with only the NAHB housing market index showing an unexpected downturn. Investors remained vigilant, considering the potential risks posed by the UAW strike and the looming threat of a US government shutdown.

EUR/USD experienced a rise of 0.24%, with factors such as opposition from ECB hawks to rate cut expectations and disappointing Michigan sentiment data lending support. Furthermore, the bond yields in the eurozone outpaced Treasury yields, and Brent crude oil prices approached triple-digit figures. Despite these dynamics, USD/JPY faced a 0.1% decline, failing to breach the 148 hurdle that had been impeding its upward trend for an extended period. The forthcoming Fed meeting was expected to influence the market’s perception of future rate hikes and Treasury yields, potentially opening room for USD/JPY to rise towards resistance around 150 before any substantial correction.

Meanwhile, Sterling remained stable but below the 200-day moving average (200-DMA), which it had broken and closed below in the previous week. Market expectations indicated an 81% probability of a BoE rate hike on Thursday, although Sterling’s performance could be influenced by perceptions of the likelihood of a follow-on rate increase. In addition, USD/CAD experienced a 0.23% drop, breaking below September’s lows, initially bolstered by rising oil prices, but subsequently facing a setback as WTI oil prices retreated below $90 later in the day. Canadian CPI data was awaited on Tuesday, potentially influencing the trajectory of USD/CAD. Meanwhile, AUD/USD and USD/CNH both recorded modest gains of 0.06% and 0.14%, respectively.

Economic Data

Currency	Data	Time (GMT + 8)	Forecast
CAD	Consumer Price Index	20:30	0.2%

Make informed decisions with the most up-to-date and reliable financial data, exclusively provided by vtmarkets.com.