Dow touches new record then struggles, S&P pulled down by tech: Live updates

Dow touches new record then struggles, S&P pulled down by tech: Live updates

Traders work on the floor of the New York Stock Exchange during morning trading on Aug. 23, 2024.

Angela Weiss | AFP | Getty Images

The Dow Jones Industrial Average rose to a record Monday, putting behind an early August sell-off as traders await Federal Reserve rate cuts on the horizon.

The 30-stock index was last down 25 points, or 0.1%, after earlier rising more than 200 points, or 0.6%. The S&P 500 slipped 0.5%, while the Nasdaq Composite sank 1.1%.

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DJIA one-month chart

Traders also appeared to be rotating out of tech and into other areas of the market. Nvidia was down 2% ahead of its earnings report due Wednesday afternoon, an event traders are harping on as key to the market and the AI enthusiasm that’s driven this bull market. Other chip stocks like Broadcom and Micron were also lower.

The market kicked off August under pressure, as concerns over a possible recession, and the unwind of a popular hedge fund trade linked to the Japanese yen, pulled stocks off their record levels. The S&P 500 lost 3% on Aug. 5 — its biggest one-day loss since 2022. The Dow also had its worst sell-off in about two years that day, plunging more than 1,000 points.

Since then, though, expectations of lower Federal Reserve interest rates and improving U.S. economic data have sent stocks soaring. The S&P 500 has surged 8% since Aug. 5 and was less than 1% away from its record high set in mid-July, while the Dow has soared about 7%. The rebound has broadened out to the wider market, with the small-cap Russell 2000 adding 3% following Powell’s comments.

Stocks are coming off of a strong week that was highlighted by comments from Fed Chair Jerome Powell that laid the groundwork for interest rate cuts. Wall Street has been anxiously awaiting a rate cut, especially in light of some worrying economic data that sparked a sell-off at the beginning of August and worried investors that elevated borrowing costs could damage the U.S. economy.

To be sure, Powell did not indicate when, or by how much, interest rates would be potentially lowered. Traders remain unanimous in their forecast for a rate cut at the Fed’s September policy meeting, however, per the CME Group’s FedWatch Tool.

“We think they’ll do 25 basis points in September, November and December, because they want the market to know that they are not behind the curve, but at the same time, they want to ensure that they are not going to go too quickly into a cutting mode,” said Sam Stovall, chief investment strategist at CFRA Research.

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