Investors in the US stock market saw a modest increase in trading activity on Monday as they cautiously awaited the upcoming Federal Reserve policy meeting. As of 06:35 ET, the futures contract was up 35 points or 0.2%, the Dow Jones Industrial Average was trading 5 points or 0.1% higher, and the S&P 500 had risen by 25 points or 0.2%.
Last week saw some minor gains in the market, with broad-based and tech-heavy indices slipping to second place. The possibility of a Fed meeting is on the horizon, with a two-day meeting set to conclude on Wednesday.
Investors are hoping the Federal Reserve will maintain interest rates between 5.25% and 5.50% and will seek clarity from policymakers about their plans for borrowing costs during the remainder of the year.
Data released last week showed the biggest jump in August in 14 months, although this was largely due to higher petrol prices. It marked the slowest pace in almost two years.
Analysts at ING noted that the Fed is ready to slow down the pace of interest rate hikes, suggesting that “the interpretation of this decision should be seen as part of the process of slowing down the pace of interest rate hikes, rather than as a real halt in rate hikes. However, with inflation easing and the job market tight and activity stable, the Fed cannot take any risks.”
Monday’s schedule features limited data releases, with investors also likely to be watching negotiations regarding a potential fourth partial US government shutdown in a decade, as they continue to seek progress in talks with the United Auto Workers Union to end one of the most destructive strikes in decades.
Representatives from automakers General Motors, Ford, and Stellantis are ready to negotiate and put an end to the strike that has halted production at three plants in Michigan, Ohio, and Missouri. The affected plants manufacture popular models, such as the Ford Bronco, Jeep Wrangler, and Chevrolet Colorado.
Oil prices saw an increase on Monday due to expectations of a tight market ahead of a series of Federal Reserve policy meetings this week. Benchmark crude oil prices have risen by more than 30% in the past three months following production cuts from Saudi Arabia and Russia, which could hit the market hard in the fourth quarter.
This week, traders will be keeping an eye on interest rate policies, major economic indicators including comments from the Federal Reserve, and developments related to China. As of 06:35 ET, US crude oil futures were trading up 0.6% at $90.58 per barrel, while gold rose 0.1% to $1,948.15/oz and the dollar strengthened by 0.2% against the Euro.