US close: Stocks manage small gains ahead of FOMC

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Chevron Corp.

$154.09

05:10 05/11/24

0.08%

$0.12

US stocks recorded modest gains on Monday, with major indices slightly increasing.

PAYPAL HOLDINGS-WI

$79.06

05:10 05/11/24

1.19%

$0.93

The Dow Jones Industrial Average edged up 0.02% to close at 34,624.30, while the S&P 500 rose by 0.07% to settle at 4,453.53.

Meanwhile, the tech-heavy Nasdaq Composite showed a fractional gain of 0.01%, ending the day at 13,710.24.

Wall Street faced some headwinds from burgeoning bond yields and escalating oil prices, alongside investor caution ahead of the Federal Reserve policy meeting slated for later in the week.

On the currency front, the dollar was last down 0.01% against sterling, trading at 80.74p, while it remained stable against the euro at 93.53 euro cents.

The greenback also saw a slight dip of 0.01% on the yen, changing hands at JPY 147.60.

“Everyone is worried about oil prices and what they will mean for inflation figures heading into the end of the year,” said IG chief market analyst Chris Beauchamp.

“While the recent pickup in US price growth is unlikely to shift the Fed into hiking on Wednesday, another hike before year-end seems more plausible.”

Federal Open Market Committee expected to maintain steady rates

Economic observers were keenly awaiting this week's announcement from the Federal Open Market Committee (FOMC), with many anticipating a decision to keep current interest rates.

While the consensus was leaning towards steady rates for now, some market analysts suggested there might be room for a potential increase later in the year.

Speculations hinted at a rate hike that could see figures land between 5.5% and 5.75%.

“As past announcements have shown that it does not like to surprise markets with its immediate rate decision, the pause looks to be a near certainty," said analysts at Lloyds Bank.

“So more interesting will be whether the Fed says anything new in its guidance on future rate moves, in particular, whether they have peaked and how soon they are likely to be cut.”

Chevron and oil majors rise, tech stocks face pressure

In equity markets, Chevron managed gains of 0.43% after the company announced that its Wheatstone liquefied natural gas facility in Australia had resumed full production.

The facility faced operational challenges recently due to worker strikes and a technical fault last week.

Chevron's stock was likely buoyed by Brent crude prices, last at $94.43 per barrel.

Over the last quarter, Brent crude had seen an increase of about $30, primarily driven by a surge in demand from China and production cutbacks from Russia and Saudi Arabia.

Fellow energy titans ExxonMobil and ConocoPhillips also registered gains, with their stocks rising by 0.81% and 0.74%, respectively.

On the downside, tech companies felt the strain, with PayPal Holdings facing a slump of 1.98% while DoorDash recorded a marginal drop of 0.01%.

Those shifts were attributed to rating changes from brokers, as MoffettNathanson downgraded its recommendation for PayPal from 'outperform' to 'market perform'.

In contrast, Mizuho Securities enhanced its rating for DoorDash, elevating it from 'neutral' to 'buy'.

Arm Holdings was another tech stock that faced pressure, which declined 4.53%.

Bernstein's recent comments likely influenced the drop as the bank initiated its coverage of the newly listed stock with an 'underperform' stance after the firm made a robust entry on the market with a debut price peaking at $69 last week.

Reporting by Josh White for Sharecast.com.

Dow Jones - Risers

Apple Inc. (AAPL) $177.97 1.69%
Visa Inc. (V) $244.66 1.49%
Travelers Company Inc. (TRV) $166.85 1.24%
Amgen Inc. (AMGN) $263.15 0.93%
Caterpillar Inc. (CAT) $280.90 0.64%
Johnson & Johnson (JNJ) $162.47 0.63%
Coca-Cola Co. (KO) $58.30 0.62%
Chevron Corp. (CVX) $167.22 0.43%
Procter & Gamble Co. (PG) $154.05 0.38%
Intel Corp. (INTC) $37.99 0.29%