US stocks rise to start short trading week as investors assess rate outlook

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US stocks rise to start short trading week as investors assess rate outlook
Michael M. Santiago/Getty Images
  • US stocks rose on Monday as investors looked ahead at the Fed's next rate move.
  • Investors are pricing in a nearly 30% chance the Fed could cut rates by March.
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US stocks rose on Monday as investors assessed the outlook for interest rates into 2024, kicking off the short trading week on a positive note.

Traders have raised their expectations for the Fed to cut rates sometime early next year, thanks to inflation running at a below-expected 3.2% yearly pace in October. Markets are now pricing in a 29% chance the Fed could trim interest rates 25 basis points by March, up from 28% on Friday and 10.5% a week ago, according to the CME FedWatch tool.

"We're in a market 'sweet spot' as investors are now convinced that the next rate change from the Fed will be a cut rather than a hike," FCA senior market analyst David Morrison said in a note on Monday.

Meanwhile, investors have their eye on the chipmaker Nvidia, which is set to report third-quarter earnings on Tuesday. The stock has been among the best-performing this year, having soared 244% since the start of 2023 as Wall Street remains enthusiastic over generative AI.

Here's where US indexes stood shortly after the 9:30 a.m. opening bell on Monday:

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Here's what else is going on today:

In commodities, bonds, and crypto:

  • West Texas Intermediate crude oil rose 2.2% to $77.56 a barrel. Brent crude, the international benchmark, climbed 2.22% to $82.38 a barrel.
  • Gold slipped 0.68% to $1,966.90 per ounce.
  • The 10-year Treasury yield rose 2 basis points to 4.465%.
  • Bitcoin rallied 1.41% to $36,957.
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