The S&P 500 traded lower on Monday amid a January rally as investors braced for the busiest week of the earnings season and a possible Federal Reserve rate hike.
The broader market index fell 0.5%, while the Nasdaq Composite fell nearly 1.2%. Meanwhile, the Dow Jones Industrial Average rose 12 points, or about 0.04%.
ford Shares fell more than 1% after the automaker said it was cutting prices and ramping up production of its Mustang Mach-E electric crossover, following a similar announcement by Tesla. caravan Stocks were briefly halted after the share price surged 27%.
Several tests are scheduled for this week for the 2023 rally. About 20% of the S&P 500 will report gains this week, including McDonald’s and General Motors on Tuesday, followed by tech giants Apple, Meta Platforms, Amazon and Alphabet later in the week.
The Federal Open Market Committee meets on Tuesday and Wednesday when the Fed is expected to hike rates by a quarter of a point. Investors will be looking for clues as to how much the central bank will hike rates to fight inflation. Traders have propelled stocks higher this year in part on weaker inflation reports which they suspect could prompt the Fed to halt its rate-hiking campaign soon.
“While there have been several positive developments, we believe the good news is now priced in and reality is likely to return with month-end and the Fed’s determination to tame inflation,” wrote Mike Wilson, chief US equities strategist at Morgan Stanley, in a Monday note.
Equities have started this year strong. The S&P 500 is up 5.5% for 2023 after a 19% loss last year, closing at a new yearly high on Friday.