Dow, S&P, Nasdaq ended mixed as the FOMC rate decision looms

The investment community watched Wall Street’s major market averages finish trading on Monday in a mixed fashion, as market participants brace for the Federal Reserve’s monetary policy announcement, which is scheduled to land later in the week.

Leading the way higher was the blue-chip Dow (DJI) as it ended on top by 0.5%. The benchmark S&P 500 (SP500) also closed out in the green by 0.1%. On the other end, the tech focused Nasdaq Composite (COMP:IND) finished lower by 0.5%.

From a sector-by-sector vantage point, nine of the 11 S&P segments concluded trading in positive territory. The two sectors that were able to advance the most on the day were Financials and Energy, while Info Tech had suffered the most.

The Treasury market noticed a slight downward shift. The shorter end U.S. 2 Year Treasury yield (US2Y) dipped 2 basis points to 3.56%. At the same time, the longer end U.S. 10 Year Treasury yield (US10Y) moved lower by 3 basis points to 3.62%. See how other yields trade across the entire yield curve here.

From the economic calendar front, the Empire State Manufacturing index registered its highest reading in September since April 2022.

“Major equity indices largely treaded water in today’s session. The price action suggests a wait and watch approach from market participants, with the quantum of the first rate cut of this cycle looking like a flip of the coin between 25 and 50 bps. While lower interest rates are conducive for growth in economic activity, the threat of the Fed being too late is genuine, given recent uptick in unemployment rate,” Ahan Vashi investing group leader of The Quantamental Investor, told Seeking Alpha.

The Fed is slated to meet on Tuesday and Wednesday, and a rate cut is widely anticipated. According to the FedWatch Tool, the target rate probability for a 50-basis point rate cut on Wednesday sits at 63% while a 25-basis point cut stands at 37%.

“Economic data has not made a compelling case for a 50bps cut at the upcoming meeting,” Standard Chartered said. The firm also went on to add: “Cutting by 50bps and being wrong would likely be worse than cutting by 25bps and being wrong.”

Three Democratic Senators, Elizabeth Warren D-MA, Sheldon Whitehouse D-RI, and John Hickenlooper D-CO sent a letter to Fed Chair Jerome Powell and his associated policymakers to advocate for a 75-basis point rate cut in order to safeguard the U.S. economy.

Also on the political side, Former President Donald Trump was safe after what the Federal Bureau of Investigation called an apparent assassination attempt on Sunday at his golf course in West Palm Beach, Florida.

As for stocks that were on the move, shares of Intel (INTC) jumped 6.3% after reports surfaced that the company is set to receive up to $3.5B in federal grants to manufacture semiconductors for the Pentagon.

Oracle advanced 5.1% as it continued its positive momentum as Baird says it has found its ‘cloud mojo.’