The Nasdaq finished at a record high on Monday and gold surged to an all-time high as investors balanced aggressive words from the Federal Reserve against indications of falling U.S. inflation.
With support from chips (.SOX), opens new tab, and Nvidia Corp (NVDA.O), opens new tab, the tech-heavy Nasdaq topped the three main U.S. stock indexes ahead of its eagerly awaited earnings release, which is anticipated on Wednesday.
After closing over 40,000 on Friday for the first time, the blue-chip Dow fell below 40,000 as the S&P 500 ended the session with a little gain.
Nvidia is driving the Nasdaq up, but other than that, it's a little bit stopped, according to Jay Hatfield, portfolio manager at InfraCap in New York. "The S&P 500 is 11% below its 200-day moving average, which is pretty extended."
"We're in a range-confined market and Nvidia will dominate global equity trading this week."
The conservative assessment of the U.S. central bank's effectiveness in controlling inflation and the timing of interest rate reductions has been reflected in remarks made by Fed members.
Vice Chairs Philip Jefferson and Michael Barr of the Fed said on Monday that it is too soon to determine if the current inflation reduction is "long lasting," and that more time is needed to implement restrictive policies. It will "take a while" for the Atlanta Fed President Raphael Bostic to express confidence that price increase is on a sustained downward trajectory.
The market is crazy; at the beginning of the year, it was anticipating six interest rate reductions, but as the year went on, the market entirely turned against expectations and conversation turned to hikes," Hatfield said.
"We are probably going to grind higher as long as it's evident the next action is going to be a cut as well as it's going to happen sometime this year."
The S&P 500 (.SPX) gained 4.86 points, or 0.09%, to 5,308.13, the Nasdaq Composite (.IXIC) climbed 108.91 points, or 0.65%, to 16,794.87, and the Dow Jones Industrial Average (.DJI) dipped 196.82 points, or 0.49%, to 39,806.77.
Uncertainty around interest rates prevented European markets from making significant advances.
The MSCI global stock index (.MIWD00000PUS) gained 0.11%, while the pan-European STOXX 600 index (.STOXX) opened with a 0.18% increase.
EM stocks increased by 0.16%. Japan's Nikkei (.N225) opened new session higher by 0.73%, while MSCI's broadest index of Asia-Pacific equities outside of Japan (.MIAPJ0000PUS) finished 0.19% higher.
After Fed officials voiced ambiguity over the timing of rate reduction, U.S. Treasury rates gradually increased.
The price of benchmark 10-year notes recently decreased by 7/32, yielding 4.4453% as opposed to 4.42% late on Friday.
The yield on the 30-year bond recently decreased by 11/32, to 4.5816%, from 4.561% late on Friday.
Amidst market anticipation for more cues on the trajectory of interest rates, the dollar saw a marginal increase relative to a global currency basket.
The euro fell 0.11% to $1.0858, while the dollar index (.DXY), opens new tab, increased by 0.15%.
At 156.30 per dollar, the Japanese yen lost 0.39% of its value against the US dollar, while the price of sterling was up 0.02% on the day at $1.2702.
As investors balanced aggressive remarks from the Fed against indications that inflation is slowing down, crude prices remained steady.
While Brent finished the day at $83.71 per barrel, down 0.32%, U.S. crude fell 0.32% to conclude at $79.80 per barrel.
As a result of last week's positive inflation news, gold reached record highs, while silver hit its highest point in more than 11 years.
A measure of economic mood, copper, reached a record high after China's announcement of measures to support its struggling real estate industry.
An ounce of spot gold increased by 0.4% to $2,424.69.
At $10,985.00 a tonne, copper increased by 2.97%.
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