U.S. Stocks Give Back Ground After Early Move To The Upside

After moving mostly higher early in the session, stocks have given back ground over the course of the trading day on Monday. The major averages have pulled back well off their highs of the session, with the S&P 500 dipping into negative territory.

Currently, the major averages are turning in a mixed performance. While the Nasdaq is up 36.50 points or 0.2 percent at 17,394.38, the S&P 500 is down 1.55 points or less than a tenth of a percent at 5,457.55 and the Dow is down 148.88 points or 0.4 percent at 40,440.46.

The early strength on Wall Street partly reflected optimism ahead of the release of earnings news from several major technology companies.

Microsoft (MSFT), Meta Platforms (META), Apple (AAPL) and Amazon (AMZN) are among the companies due to report their quarterly results this week.

Buying interest waned shortly after the start of trading, however, as traders seemed reluctant to make significant moves ahead of the Federal Reserve’s monetary policy meeting this week.

While the Fed is widely expected to leave interest rates unchanged, traders will be looking to the accompanying statement for additional clues about a possible rate cut in September.

According to CME Group’s FedWatch Tool, there is currently an 89.6 percent chance the Fed will lower rates by a quarter point in September and a 10.1 percent chance of a half point rate cut.

Later in the week, the focus is likely to shift to the Labor Department’s closely watched monthly jobs report for July.

Sector News

Energy stocks have come under pressure over the course of the session amid a steep drop by the price of crude oil, with crude for September delivery slumping $1.25 to $75.91 a barrel.

Reflecting the weakness in the energy sector, the NYSE Arca Oil Index is down by 1.9 percent and the Philadelphia Oil Service Index is down by 1.3 percent.

Considerable weakness has also emerged among airline stocks, as reflected by the 1.4 percent loss being posted by the NYSE Arca Airline Index.

Computer hardware and financial stocks have also moved to the downside on the day, while some strength remains visible among networking stocks.

Other Markets

In overseas trading, stock markets across the Asia-Pacific region moved mostly higher during trading on Monday. Japan’s Nikkei 225 Index surged by 2.1 percent, while Hong Kong’s Hang Seng Index jumped by 1.3 percent.

Meanwhile, the major European markets are turning in a mixed performance on the day. While the U.K.’s FTSE 100 Index is up by 0.2 percent, the German DAX Index is down by 0.5 percent and the French CAC 40 Index is down by 1.1 percent.

In the bond market, treasuries have moved modestly higher as traders look ahead to the Fed decision later this week. Subsequently, the yield on the benchmark ten-year note, which moves opposite of its price, is down by 1.8 basis points at 4.181 percent.

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