By Chuck Mikolajczak
NEW YORK (Reuters) -The S&P 500 eked out a slight gain in a subdued session while the Nasdaq fell on Monday, weighed down by a drop in technology stocks as investors assessed the likelihood of an upsized rate cut from the U.S. Federal Reserve this week.
The S&P technology index, the best performer of the 11 major S&P sectors this year, lost 0.95% as the session’s biggest decliner.
Apple dropped 2.78% as the biggest drag to both the benchmark S&P index and Nasdaq Composite, after an analyst at TF International Securities said demand for its latest iPhone 16 models was lower than expected.
The demand concerns also weighed on chipmakers, with Nvidia, the best performer on the S&P 500 this year, down 1.95%, Broadcom off 2.19% and Micron Tech 4.43% lower to push the Philadelphia SE Semiconductor index down by 1.41%.
“If people want to raise a lot of money quickly, how do they do it? They go sell the names that they can sell really quickly without necessarily destroying it. So you can sell Apple, you can sell Nvidia, you can sell Amazon, you can sell Microsoft very quickly and raise a lot of cash,” said Ken Polcari, chief market strategist at SlateStone Wealth in Jupiter, Florida.
“They want to do it in front of the Fed in case they’re getting nervous or they want to raise cash to just have cash available to put to work.”
The Dow Jones Industrial Average rose 228.30 points, or 0.55%, to 41,622.08, the S&P 500 gained 7.07 points, or 0.13%, to 5,633.09 and the Nasdaq Composite lost 91.85 points, or 0.52%, to 17,592.13.
Of the 11 S&P 500 sectors, only tech and consumer discretionary stocks were lower on the day while financials, up 1.22%, and energy, up 1.2%, were the best performers.
Markets have rallied since the start of this year on expectations the Fed would begin loosening its monetary policy, while data has suggested the economy could avoid entering a recession.
The Dow closed at a record high on Monday and the S&P 500 is less than 1% from its closing record set in July.
Market expectations on the size of the rate cut the Federal Reserve will announce on Wednesday have been volatile in recent days and are currently pricing in a 59% chance for a 50-basis-point cut, according to CME’s FedWatch Tool.
Intel Corp jumped 6.36% after a report showed it qualified for as much as $3.5 billion in federal grants to make semiconductors for the U.S. Department of Defense.
Boeing declined 0.78% after the planemaker said it was freezing hiring and weighing temporary furloughs in the coming weeks as its workers’ strike stretched to its fourth day.
Advancing issues outnumbered decliners by a 2.74-to-1 ratio on the New York Stock Exchange. On the Nasdaq, advancers outnumbered decliners by a 1.17-to-1 ratio.
The S&P 500 posted 88 new 52-week highs and one new low while the Nasdaq Composite recorded 143 new highs and 83 new lows.
Volume on U.S. exchanges was 9.74 billion shares, compared with the 10.75-billion average for the full session over the last 20 trading days.
(Reporting by Chuck Mikolajczak; Editing by Rod Nickel)
