SP 500 broadly flat as investors weigh the odds of

S&P 500 broadly flat as investors weigh the odds of less aggressive rate hikes

  • Tech stocks win
  • Macy’s, Lululemon out ahead of holiday quarter warnings
  • Indices: Dow down 0.3%, S&P 500 down 0.1%, Nasdaq up 0.6%

NEW YORK, Jan 9 (Portal) – The S&P 500 Index (.SPX) pared early gains to end little changed on Monday as expectations that the Federal Reserve would become less aggressive in raising interest rates were dashed by ongoing inflation concerns .

The Dow closed lower and the Nasdaq Composite (.IXIC) closed well below daily highs.

Investors are awaiting comment on Tuesday from Fed Chair Jerome Powell, who some strategists expect needs more time to show inflation is under control.

Cash bets showed a 77% probability of a 25 basis point hike at the Fed’s February policy meeting.

A CPI report due Thursday could hold the key to interest rate expectations, said Quincy Krosby, chief global strategist at LPL Financial in Charlotte, North Carolina. “This week’s CPI report will be critical in fine-tuning the Fed fund futures market.”

Investors may also have sold some stocks after recent strong market gains, said Paul Nolte, a portfolio manager at Chicago-based Kingsview Investment Management. “You’re seeing a bit of profit taking ahead of the CPI number due this week.”

The technology sector (.SPLRCT) gained as government bond yields fell. Consumer discretionary stocks (.SPLRCD) also rose, with Amazon.com Inc (AMZN.O) up 1.5% after Jefferies said cost pressures for the e-commerce giant would ease in the second half of the year.

Also, the S&P 500 companies are about to start their fourth quarter reporting period, with results from the top US banks expected later this week.

Traders work on the trading floor of the New York Stock Exchange (NYSE) in New York City, U.S. January 5, 2023. Portal/Andrew Kelly

The Dow Jones Industrial Average (.DJI) fell 112.96 points, or 0.34%, to 33,517.65, the S&P 500 (.SPX) lost 2.99 points, or 0.08%, to 3,892.09 and the Nasdaq Composite (.IXIC) is up 66.36 points, up 0.63% to 10,635.65.

Broadcom Inc (AVGO.O) shares were down 2% in late trade after Bloomberg reported that Apple Inc (AAPL.O) plans to drop a Broadcom chip in 2025, citing people familiar with the matter to let and take an in-house design.

Friday’s jobs report, which showed a moderation in wage increases, raised hopes that the Fed might become less aggressive in its push to raise interest rates to curb inflation.

Tesla Inc (TSLA.O) shares rose 5.9% after the electric vehicle maker hinted at longer wait times for some versions of the Model Y in China, suggesting recent price cuts could stoke demand.

Macy’s Inc (MN) fell 7.7% and Lululemon Athletica Inc (LULU.O) fell 9.3% after both retailers issued disappointing forecasts for the holiday quarter.

Volume on US exchanges was 11.35 billion shares compared to the average of 10.90 billion for the entire session over the last 20 trading days.

Rising issues predominated on the NYSE at a 1.85 to 1 ratio; on the Nasdaq, a 1.48 to 1 ratio favored movers.

The S&P 500 posted 13 new 52-week highs and two new lows; the Nasdaq Composite posted 129 new highs and 32 new lows.

Additional reporting from Shubham Batra, Amruta Khandekar and Ankika Biswas in Bengaluru; Edited by Shounak Dasgupta and Richard Chang

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