The US stock market exhibited a mixed performance on Monday, with Apple Inc soaring to a new high, while traders pondered the likelihood of the Federal Reserve halting its rate hikes during its upcoming policy meeting.
Apple Inc (AAPL.O) saw its stocks increase by 0.9% following the tech giant's announcement about updating its desktop and laptop Mac lineup with its proprietary processor chips. This is in anticipation of the company's impending launch of its pioneering mixed-reality headset. Apple shares had even surged by up to 2.2% at their peak.
Several other notable growth stocks saw a positive trend, with Alphabet Inc (GOOGL.O) witnessing a 1.5% uptick, and Tesla (TSLA.O) seeing a 2% increment. Tesla's boost followed the EV maker's surge in sales of China-manufactured vehicles within China during May.
US stocks experienced a boost on Friday following a report that showed a moderation in wage growth in May. This led to increased speculation that the Federal Reserve might hold off on a rate hike during the next week. A deal in Washington that prevented a devastating debt default was also well received by investors.
Adding to the forecast that the Fed might suspend its rate hikes, a survey from the Institute for Supply Management indicated a stagnation in the growth of the US services sector in May due to a slowdown in new orders. A three-year low in a measure of the prices businesses paid for inputs was observed, which might support the Fed's battle against inflation.
Traders, as per CME Group's FedWatch tool, have factored in a roughly 80% probability that the Fed will maintain the current interest rates at its June 13-14 policy meeting. They do, however, anticipate another increase in July.
Tim Ghriskey, Senior Portfolio Strategist at Ingalls & Snyder in New York, commented, "Weak economic reports, ironically, are good news for the Fed's stance. They could imply that the series of interest rate hikes have begun to fulfill their purpose of curtailing inflation."
A strong earnings season that surpassed expectations, coupled with forecasts of a possible pause in the Fed's stern monetary tightening cycle, have uplifted the US equity markets recently. The S&P 500 saw a rise earlier on Monday and was briefly poised to close 20% higher than its closing lows of October 2022.
The S&P 500, however, edged down 0.03% to 4,280.95 points, while the Nasdaq moved up 0.10% to 13,253.86 points. The Dow Jones Industrial Average slipped 0.38% to 33,634.67 points.
Palo Alto Networks Inc (PANW.O) experienced a 5.5% rise, with the cybersecurity company set to replace Dish Network (DISH.O) in the S&P 500 index. Dish Network shares, however, slid by 1.0%.
US regulators are reportedly planning to impose stricter rules on major US banks, which could result in a 20% increase in capital requirements on average. As a result, significant US banks experienced a dip in their shares.
