NEW YORK (Reuters) – U.S. stocks fell on Monday as investors took a post-Thanksgiving pause as the holiday shopping season began and retailers lured bargain hunters with Monday deals online.
The three major US stock indices ended the session modestly in the red.
“Markets are taking a breather to absorb these gains that we saw in November,” said Tom Heinlein, national investment strategist at U.S. Bank Wealth Management in Minneapolis. “We are at the upper end of a trading range that we have been in for some time.”
Online shopping deals as part of Cyber Monday are expected to entice shoppers to spend a record $12 billion, according to Adobe Analytics, in the latest optimistic sign regarding the health of the American consumer, whose spending is responsible for about 70% of gross domestic product. American. .
“After four weeks of very strong and positive market activity, we are seeing investors taking a break and focusing on the data,” said Greg Bassuk, CEO of AXS Investments in New York. “All eyes this week will be on additional inflation data as well as consumer confidence and spending to determine whether Main Street is keeping pace with Wall Street.”
Consumer resilience and labor market tightness amid signs of a slowing economy have led many market watchers to embrace the possibility that while the Federal Reserve has reached the end of its policy tightening cycle, it may keep restrictive interest rates in place for longer than that. is expected.
Financial markets expected a 96.8% chance that the central bank would leave the Fed’s funds rate target unchanged at next month’s meeting, with a rate cut potentially starting in mid-2024, according to CME’s FedWatch tool.
On the economic front, a larger-than-expected decline in new home sales added to the muted tone. Later in the week, market participants look ahead to the Commerce Department’s second report on third-quarter GDP expected on Wednesday, which will be followed on Friday by a broad personal consumption expenditures (PCE) report.
Statements by Fed policymakers later in the week will also be analyzed for clues on the duration of the central bank’s restrictive policy.
![Traders work on the floor of the New York Stock Exchange in New York](https://cloudfront-us-east-2.images.arcpublishing.com/reuters/FT544524SJLCNCJL63MR2Y5VSQ.jpg)
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Traders work on the floor at the New York Stock Exchange (NYSE) in New York City, US, October 27, 2023. REUTERS/Brendan McDiarmid/File Photo Obtaining licensing rights
“We expect the Fed to continue to be cautious about concluding that they have reached the end of raising interest rates,” Heinlein added. “We are close to the peak rate – if not at it – so the debate is about how long interest rates will remain at this level, and when or whether they will cut rates in 2024.”
The Dow Jones Industrial Average fell 56.68 points, or 0.16%, to 35,333.47 points, the Standard & Poor’s 500 Index fell 8.91 points, or 0.20%, to 4,550.43 points, and the Nasdaq Composite Index fell 9.83 points, or 0.20%, to 14,241.02.
Among the 11 major sectors in the S&P 500, Healthcare (.SPXHC) and Industrials (.SPLRCI) suffered the largest declines, while Real Estate (.SPLRCR) and Consumer Discretionaries (.SPLRCD) posted the largest gains.
Amid Cyber Monday excitement, Affirm Holdings (AFRM.O) stock rose 12.0%, as the payment platform’s “buy now, pay later” option was seen hitting an all-time high, boosting online holiday sales.
Shares of online gifting platforms Etsy (ETSY.O) and Shopify rose 3.0% and 4.9%, respectively.
Elsewhere, Crown Castle International (CCI.N) advanced 3.4% as activist investor Elliott Investment Management sought executive and board changes at the wireless tower owner.
GE HealthCare (GEHC.O) stock fell 3.5% after UBS downgraded the medical device company’s stock to “sell” from “neutral.”
Declining issues outnumbered advancing issues on the NYSE by a ratio of 1.25 to 1; On the Nasdaq, a 1.63-to-1 ratio favored losing stocks.
The S&P 500 recorded 38 new 52-week highs and no new lows. The Nasdaq Composite recorded 84 new highs and 79 new lows.
Trading volume on US stock exchanges reached 9.25 billion shares, compared to an average of 10.42 billion for the full session during the last 20 trading days.
(Additional reporting by Stephen Culp in New York) Additional reporting by Shristi Achar A and Amruta Khandekar in Bengaluru (Editing by Shinjini Ganguly and Matthew Lewis)
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