US stocks rise to start short trading week as investors assess rate outlook
- 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.
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:
- S&P 500: 4,516.89, up 0.06%
- Dow Jones Industrial Average: 34,959.66, up 0.04% (12.38 points)
- Nasdaq Composite: 14,162.07, up 0.26%
Here's what else is going on today:
- Warren Buffett is expecting economic trouble. That's why his company has built up a record $157 billion cash pile, according to economist Steve Hanke.
- Microsoft is on pace to add nearly $50 billion of value after hiring Sam Altman, who was ousted from OpenAI.
- Legendary short-seller Jim Chanos slammed Elon Musk supporters as news emerges that the Tesla bear will shut down his funds.
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