Wall Street ended lower on Monday after stocks rallied last week following Federal Reserve Chairman Jerome Powell’s hint at a possible rate cut in September. Investors also looked forward to AI-chipmaker NVIDIA’s quarterly earnings, scheduled to be released later this week. All three major indexes ended in negative territory.
The Dow Jones Industrial Average (DJI) slipped 0.8% or 349.27 points, to end at 45,282.47 points, after hitting a record high of 45,631.74 points.
The S&P 500 declined 0.4% to finish at 6,439.32 points. Consumer staples, health care, and utilities stocks were the worst performers.
The Consumer Staples Select Sector SPDR (XLP) fell 1.7%. The Health Care Select Sector SPDR (XLV) declined 1.4%, while the Utilities Select Sector SPDR (XLU) slid 1.1%. Nine of the 11 sectors of the benchmark index ended in negative territory.
The tech-heavy Nasdaq fell 0.2%, to close at 21,449.29 points.
The fear gauge CBOE Volatility Index (VIX) was up 4.01% to 14.79. Decliners outnumbered advancers on the S&P 500 by a 4-to-1 ratio. On the S&P 500, there were 17 new highs and no new lows.
A total of 14.2 billion shares were traded on Monday, lower than the last 20-session average of 17.1 billion.
Wall Street witnessed a choppy trading session on Monday as investors assessed the outlook for interest rates following Powell’s suggestion last week that the Federal Reserve could ease its monetary policy in September.
Powell at the Jackson Hole Symposium said that an interest rate cut could be coming in September, given the weakening labor market. Following Powell’s comments, hopes of a rate cut in September soared, sending stocks on a rally on Friday, with the Dow hitting an all-time closing high. Markets are pricing in an 84% chance of a quarter percentage point rate cut in September, according to the CME Group’s FedWatch tool.
The Nasdaq initially climbed on Monday after shares of NVIDIA Corporation (NVDA) rose ahead of its earnings later this week. However, the tech-heavy index soon lost steam and gave up all its gains. Shares of NVIDIA, however, ended 1% higher. NVIDIA has a Zacks Rank #3 (Hold). You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here.
Shares of Intel Corporation (INTC) also initially climbed, extending its rally, after Commerce Secretary Howard Lutnick said last week that the Government has acquired a 10% stake in the company. However, Intel’s shares ended 1% lower on Monday.
