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S&P 500, DJI edge up, Nasdaq off slightly
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U.S. Apr ISM Manufacturing PMI > estimate
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Dollar up slightly; gold ~flat; crude off >1%; bitcoin off
~3%
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U.S. 10-Year Treasury yield rises to ~3.52%
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U.S. STOCKS MIXED AHEAD OF KEY FED DECISION ON RATES (0955 EDT/1355 GMT) Stocks on Wall Street are mixed and little changed early on Monday as investors await a much-anticipated decision in two days on not only if the Federal Reserve raises interest rates by 25 basis points, but whether clues are provided for a similar hike in June. Industrials are leading the 11 S&P 500 sectors higher, while energy is the biggest decliner. Semiconductors , Dow Transports and small caps are also gaining, while value is outpacing growth . While a rate hike on Wednesday has essentially been a foregone conclusion - the probability of rates rising to the 5.00-5.25% range is 89.5%, according to CME Group's FedWatch Tool - chances of a June 14 hike are now 24.2%.
While many in the market still expect the Fed to begin cutting rates later this year, some believe Fed Chair Jerome Powell will cool that notion at Wednesday's press conference. Action Economics forecasts the start of the next rate-easing cycle to be postponed until the first quarter of 2024 and as a result, the month of May may disappoint, said Sam Stovall, chief investment strategist at CFRA Research in a note. Markets in Europe were closed for May Day.
The following is a snapshot of market prices in early trading:
(Herbert Lash)
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S&P 500 INDEX: PUFFED UP FOR WHAT COULD BE A PIVOTAL WEEK
(0900 EDT/1300 GMT)
The S&P 500 index ended Friday back above the weekly
Ichimoku cloud formation for the first time in more than a year.
Although seen as a bullish development, the benchmark index
still faces a cluster of major resistance hurdles not far above
Friday's 4,169.48 close, in a week permeated by a number of big
event risks:
Resistance resides at the Feb. 2 high at 4,195.44, the 23.6% Fibonacci retracement of the March 2020-January 2022 high, at 4,198.70, the 100-week moving average, which ended Friday at 4,202.92, and the August 26 Fed-Chair Powell Jackson Hole speech high, at 4,203.04. S&P 500 failures around 4,200 in late August of last year, and early February of this year, both led to sharp declines. From the late-August high, the SPX lost as much as 17% over the next 33 trading days (tds) as it declined to new lows into October. From the early-February peak, the SPX fell as much as 9.2% over the next 26 tds into its March low. Thus, traders will be keenly focused on this week's action, especially with the results of an FOMC meeting on Wednesday, Apple's quarterly report on Thursday and April jobs data on Friday.
(Terence Gabriel)
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(Terence Gabriel is a Reuters market analyst. The views
expressed are his own)
