NEW YORK/LONDON: Major stock markets mostly advanced Monday as investors looked ahead to key interest-rate decisions this week in the United States and elsewhere. The coming days, including Wednesday’s Fed decision and Friday’s employment report promise to be "market moving and likely exhausting from analytical standpoint,” said Briefing.com analyst Patrick O’Hare. "The news cycle, of course, is full of uncertainty, so the unknown news is always hanging out there as a market-moving catalyst as well.”
The Dow Jones Industrial Average was down 0.1 percent at 40,561.42. The broad-based S&P 500 gained 0.4 percent to 5,479.85, while the tech-rich Nasdaq Composite Index jumped 0.9 percent to 17,505.04. Among individual companies, McDonald’s gained 2.7 percent despite missing analyst estimates as the company vowed to redouble efforts to win over value-focused consumers.
This week’s earnings calendar includes reports from Apple, Microsoft, Boeing and ExxonMobil.
Leading Asian indices largely gained, Europe was mixed and Wall Street’s top stock indices rose following last week’s volatility caused by mixed earnings and big selling of technology stocks. "This week is a crucial one for the markets, with significant data releases, central bank meetings, and major company earnings reports set to impact indices, metals, and currencies,” said market analyst Fawad Razaqzada at City Index and FOREX.com.
The US Federal Reserve, Bank of England and Japan’s central bank are due this week to update on their monetary policies, with US jobs data and more results from multinationals also set to come out. "While no change is expected at the Federal Reserve meeting this week, the odds are now strongly in favor of a cut in September,” noted Richard Hunter, head of markets at Interactive Investor.
Razaqzada said "the Fed adopting a more dovish tone is what we expect to witness”, adding that in addition to the 0.25-percentage-point cut in September the market has priced in nearly two more quarter-point rate cuts. On Thursday, a day after the Fed’s latest decision, the Bank of England may cut borrowing costs for the first time since the COVID pandemic after a sizeable fall to British inflation this year, analysts said.
They added that the decision is on a knife-edge, similar to what is expected over the Bank of Japan’s decision. Expectations for a rise, either this week or at the BoJ’s next meeting, along with bets on a Fed cut, have helped push the yen higher against the dollar after it hit a four-decade low near at the start of July.
Moody’s Analytics believes the BoJ will leave rates on hold despite a pickup in Japanese inflation. Oil prices were steady despite rising tensions in the Middle East as Zionist Prime Minister Benjamin Netanyahu vowed a "severe response” to the rocket fire in the annexed Golan Heights that killed 12 children. — AFP