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Market Snapshot: Stocks turn lower as bounce fades while investors brace for more Fed tightening

U.S. stocks flipped between gains and losses on Monday as investors braced for a Federal Reserve meeting thats likely to deliver another large interest-rate hike and shed further light on the Feds plans for monetary policy.

Whats happening
  • The Dow Jones Industrial Average DJIA, -0.12% was down 22 points, or significantly less than 0.1%, at 30,801, after falling 263 points at its session low.
  • The S&P 500 SPX, -0.14% was off 4 points, or 0.1%, at 3,870.
  • The Nasdaq Composite COMP, -0.11% was slightly lower by 12 points, or 0.1%, at 11,437.

The other day, Dow industrials fell 4.1% to get rid of at 30,822.42, as the Nasdaq Composite saw a 5.5% weekly drop to 11,448.40. The S&P 500 finished Friday at 3,873.33 falling 0.7% in the session and 4.8% for the week because of its lowest close since July 18 and ending below important chart support at 3,900.

IN A SINGLE Chart: Why stock-market bears are eyeing June lows after S&P 500 falls back below 3,900

Whats driving markets

Stocks sought out upward momentum on Monday following last weeks steep drop, as the market focus was firmly with this weeks two-day meeting of the Feds policy-setting Federal Open Market Committee, that is because of end Wednesday. An interest rate hike of three-quarters of a spot is expected, and attention will undoubtedly be placed on the accompanying dot plot of rate projections.

Equities pared losses and intermittently turned positive as Wall Street embraced Ralph Lauren Corp.s

RL, +2.44%

outlook and found value in beaten up home builders and airlines, in accordance with Edward Moya, senior market analyst for the Americas at Oanda Corp.

Shares of Ralph Lauren rose 2.2% following the company outlined its strategic growth plan in a statement and saidit expects to come back about $2 billion excessively cashflow to shareholders through fiscal 2025 by means of dividends and share buybacks. Additionally it is targeting a compound annual revenue growth rate on the next 3 years in the mid to high single digits.

It appears like higher-income families remain in an excellent position to take care of another wave of price increases, Moya said via phone.

However, theres been an evergrowing quantity of pessimismand diminished appetite for several risk assets, he said. We have been not likely to have extremepositioningahead of the Feds decision, and thats why trading will undoubtedly be volatile for another 48 hours.

See: Fed to place a company foot on the brake pedal this week

Stocks felt heat as Treasury yields continued their rise, with the policy-sensitive 2-year rate TMUBMUSD02Y, 3.935% heading nearer to 4%, an even that some say could send shivers through the entire financial market. The final time the 2-year yield ended the brand new York trading session at 4% or more was on Oct. 16, 2007, when it closed at 4.127%. Rising yields make bonds look more appealing in accordance with stocks.

KEY TERM: More pain ahead for stocks as S&P 500 more likely to bottom around 3,300, Interactive Brokers founder says

The U.K. currency markets was closed in observance of the funeral of Queen Elizabeth II in London, attended by heads of state including U.S. President Joe Biden.

Have to know: The mighty dollar could be going to crack, says this strategist, who offers stocks to view on either side.

Companies in focus
  • Stocks of the three key vaccine makers fell Monday following Sundays 60 Minutes interview with President Joe Biden, who said the pandemic has ended. Shares of Moderna Inc. MRNA, -9.46% fell 9.2%. Pfizer Inc. PFE, -1.85% was down 1.8% and its own German partner BioNTech SE BNTX, -8.97% dropped 8.5%.
  • AutoZone Inc. AZO, -2.86% shares fell 2.3% even with the auto parts retailer reported fiscal fourth-quarter profit and sales that rose above expectations, helped by continued strength in its commercial business.
  • German auto maker Volkswagen AG VOW, +3.34% is targeting a valuation as high as $71.5 billion (75 billion euros) because of its initial public offering of Porsche, in what will be among Europes largest-ever IPOs. Volkswagens board announced Sunday it intends to list shares between 76.50 and 82.50 euros, in the centre selection of analysts expectations. Volkswagens U.S. common stock VLKPF, +3.19% rose 3.2%.

Hear from Ray Dalio at theBest New Ideas in Money Festival Sept. 21-22 in NY. The hedge-fund pioneer has strong views on where in fact the economy is headed.

Steven Goldstein contributed to the article.

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