Wall Street’s major indexes rose Monday in subdued trade as energy stocks tracked higher crude oil prices, while investors awaited the Federal Reserve’s interest rate decision later this week.
Energy was the biggest gainer in the S&P 500 sector, up 1.1%, as crude prices firmed near the $95-per-barrel mark on tight supplies.
Rising crude prices threaten to keep inflation high even as a string of stronger-than-expected recent data has eased concerns about a possible recession without fueling fears of a September rate hike.
Consumer discretionary was the worst-hit sector, down 0.7%, as electric car maker Tesla fell 2.6% to a one-week low, while VF Corp lost 4.2% with Piper Sandler downgrading it to “neutral” from “overweight too much”.
Major growth names including Microsoft and Amazon.com edged 0.1% and 0.4% lower, respectively, as US Treasuries yielded higher on uncertainty about the direction of interest rates through the end of the year. The 10-year yield hovered around its highest level since 2007.
“Investors are just sitting on their hands right now and waiting to see what the Fed does, its updates to the dot plots and maybe the future direction of rates,” said Paul Nolte, market strategist at Murphy & Sylvest Wealth Management.
“There will be one more increase before the end of the year and we will see rates remain on hold for some time because inflation is still not close to their target.”
Traders largely expect the Fed to keep rates unchanged at 5.25% to 5.5% during its meeting on Wednesday, while their odds of another pause in November stand at 66%, according to the CME FedWatch Tool.
Goldman Sachs, like other big investors such as JP Morgan Asset Management and Janus Henderson Investors, expects the central bank to raise its economic growth estimates this week. It also expects rates to have peaked.
British chipmaker Arm Holdings, which opened higher on Thursday, fell 5.1 percent after Bernstein downgraded the stock to an “underperform” rating.
A drop in chipmakers on worries about weak demand and a decline in megacap growth stocks sent the S&P 500, Nasdaq and Dow to their worst one-day declines on Friday since August 24, with the index losing between 0.8% and 1.5%.
At 11:51 a.m. ET, the Dow Jones Industrial Average was up 83.71 points, or 0.24%, at 34,701.95, the S&P 500 was up 12.37 points, or 0.28%, at 4,462.69, and the Nasdaq Composite 2 or 02. points 02. %, in 13,736.43.
Chipmaker Micron Technology rose 1.3%, following Friday’s negative results, after Deutsche Bank upgraded its rating on the stock to “buy” from “hold”.
L3Harris Technologies rose 1.7% after Wells Fargo upgraded the aerospace and defense company to “overweight” from “equal weight”.
PayPal Holdings lost 1.3% after MoffettNathanson downgraded the digital payments company to “market perform” from “outperform”.
Declining issues outnumbered advancers by a ratio of 1.02 to 1 on the NYSE and by a ratio of 1.46 to 1 on the Nasdaq.
The S&P index recorded five new 52-week highs and 11 new lows, while the Nasdaq recorded 24 new highs and 172 new lows.