Stocks mostly fall after Friday's gains; US Dollar edges higher
After a strong performance on Friday, major stock indexes largely declined on Monday. Federal Reserve Chair Jerome Powell
The dollar has stabilized, and a rate cut in September is likely but not guaranteed.
dollar
Powell's comments at Jackson Hole caused the market to fall last week. U.S. Treasury Yields rose on Monday.
Barclays BNP Paribas, Deutsche Bank and other major brokerages now expect the Fed to cut rates by 25 basis points in September. Fed funds futures are pricing 84% odds that a rate cut will occur in September, according to CME Group's FedWatch Tool.
On Friday, there was much excitement about Powell essentially indicating that a rate reduction would be likely. Peter Cardillo is the chief market economist of Spartan Capital Securities, New York.
"I believe that we will see a rate reduction, but it won't be by more than 25 basis point, and much depends on the PCE price index this Friday."
The Fed could still be influenced by data for August that is due to arrive before its meeting on September 16-17. Fed's preferred measure of inflation is the U.S. consumer prices reading due Friday.
The dollar index (which measures the greenback in relation to a basket of currencies) rose by 0.25%, reaching 98.09; the euro fell 0.37%, at $1.1672.
The dollar gained 0.49% against the Japanese yen to reach 147.65.
The Dow Jones Industrial Average dropped 250.35 points or 0.55% to 45,382.14, while the S&P 500 declined 4.37 points or 0.06% to 6,462.80. Meanwhile, the Nasdaq Composite rose 67.18 or 0.32% to 21,564.24.
Investors will also be eager to hear the results of Nvidia on Wednesday.
The MSCI index of global stocks fell by 0.32 points or 0.03% to 954.97. The pan-European STOXX 600 fell by 0.45%.
London's markets were closed on a public holiday, which reduced the overall trading volume in Europe. Sources told the weekend that they expect the European Central Bank to keep rates unchanged in September. If the economy continues to weaken, discussions about future cuts could resume in the fall.
Donald Trump, President of the United States
criticized
South Korea, just hours before its summit with Lee Jae Myung on Monday. Both countries are involved in low-level discussions about trade, nuclear energy and military expenditure.
The Korean won fell 0.33% in value against the US dollar.
As traders prepare for the auctions scheduled this week, U.S. Treasury rates also increased.
The yield on the benchmark 10-year U.S. notes increased 2.9 basis points, to 4.287%.
Euro zone bond yields rose earlier, too, after falling late Friday.
Brent crude increased 1.76% to 68.92 dollars per barrel. U.S. crude gained 1.98%, to $64.92 a barrel. Spot gold increased 0.05%, to $3373.48 per ounce. Reporting by Caroline Valetkevitch, in New York, and Nell Mackenzie, in London. Editing by Dhara Ranadasinghe and Shri Navaratnam; Gareth Jones and Jan Harvey, and Andrew Heavens.
(source: Reuters)
