Market Overview
Wall Street’s main indices traded lower on Monday as investors waited for a speech from Federal Reserve chair Jerome Powell. This speech could give hints about the interest rate decision for this month. The US manufacturing activity shrank for the ninth straight month in November, with factories reporting weakening new orders and rising input costs due to tariffs.
Economic Data and Interest Rates
The manufacturing activity shrinkage was driven by weakening new orders and rising input costs, partly due to tariffs. Investors are looking forward to Powell’s speech for fresh clues on the interest rate path. Most policymakers have been cautious, but some have given signals that there might be further monetary easing in the coming months. Traders are pricing in an 87.6% chance for a 25-basis-point interest rate cut in December, which is roughly double the odds from late last month.
Upcoming Reports and Events
Investors are also waiting for a delayed report on the Personal Consumption Expenditures Index, the Fed’s preferred inflation gauge, which is due on Friday. This report will give more insight into the current state of the economy and inflation. The Fed is worried about inflation, but it’s hard to feel good about a rate cut without any data. According to Robert Pavlik, senior portfolio manager at Dakota Wealth, Powell will probably err on the side of protecting the overall economy by cutting rates and then being more hawkish after the meeting.
Market Performance
At 10:03 am, the Dow Jones Industrial Average fell 121.38 points, or 0.25%, to 47,595.04, the S&P 500 lost 25.83 points, or 0.37%, to 6,823.45, and the Nasdaq Composite lost 127.65 points, or 0.55%, to 23,238.04. A tick-up in sovereign bond yields also pressured stocks, with the 10-year benchmark up around six basis points.
Retail and Crypto Markets
Big-box retailers were in focus as Cyber Monday sales kicked off, with shoppers expected to spend $14.2 billion online, according to Adobe Analytics. This follows a record $11.8 billion spent on Black Friday, which is up 9.1% from 2024. Shares of Walmart and Target edged higher, while Bath and Body Works jumped 5%. US-listed crypto stocks were big losers as bitcoin fell back below $90,000, extending losses after its steepest monthly decline since the 2021 crypto crash.
Individual Stocks
Elon Musk’s Tesla was slightly lower after monthly registrations in key European markets, including Norway, France, and Sweden, slumped from a year earlier. Synopsys gained 4.9% after AI chip leader Nvidia said it had invested $2 billion in the semiconductor design software provider. Declining issues outnumbered advancers by a 1.47-to-1 ratio on the NYSE and by a 1.8-to-1 ratio on the Nasdaq.
Conclusion
In conclusion, the market is waiting for Powell’s speech and the upcoming reports to give more insight into the economy and interest rates. The manufacturing activity shrinkage and tariffs are affecting the economy, and investors are looking for signs of monetary easing. The market performance is mixed, with some stocks edging higher and others falling. The retail and crypto markets are also experiencing changes, with big-box retailers focusing on Cyber Monday sales and crypto stocks falling due to bitcoin’s decline. As the market continues to evolve, it’s essential to stay informed about the latest developments and reports to make informed decisions.
