UPDATE: US stocks remained virtually unchanged as investors prepare for a critical decision from the Federal Reserve this week. The Fed has begun a two-day policy meeting, with traders anticipating a quarter-percentage point rate cut, even amid inflation concerns still above the central bank’s 2 percent target.
As the clock ticks down, the market is on high alert. JP Morgan, the largest bank in the US, recently tempered gains, revealing that it expects expenses to soar to approximately $105 billion (AUD 158 billion) in 2026, largely due to growth-related costs. This announcement has led to a 4 percent drop in JP Morgan shares, marking the bank’s most significant loss since early April.
At 2:50 PM EDT on Tuesday, the Dow Jones Industrial Average fell by 120.56 points, or 0.25 percent, landing at 47,618.76. The S&P 500 lost 0.26 points to 6,846.60, while the Nasdaq Composite gained 34.63 points, or 0.15 percent, reaching 23,580.53.
The economic landscape remains uncertain. Tuesday’s Labor Department report indicated that job openings in October increased slightly, but hiring continues to lag. Jeff Schulze, head of economic and market strategy at ClearBridge, noted, “The bias for the market right now suggests a modestly less dovish Fed due to the job openings.”
Traders are pricing in an 87 percent likelihood of a 25-basis-point rate cut on Wednesday, according to CME’s FedWatch Tool. However, Schulze points to a “higher likelihood of a pause” following the anticipated rate cut.
Meanwhile, the tech sector is reacting to mixed news. US President Donald Trump announced he would permit Nvidia to export its H200 processors to China with a 25 percent fee. However, concerns are rising as reports indicate that Beijing may restrict access to these chips, causing Nvidia shares to drop 0.6 percent after a premarket rally of nearly 2 percent.
Investor sentiment surrounding corporate spending on AI infrastructure is set to face greater scrutiny, especially with earnings reports from Oracle and Broadcom due later this week.
The stock market is also watching a bidding war for Warner Bros between Paramount Skydance and Netflix, with Warner Bros shares rising 3 percent amid the competition.
In a broader market context, advancing issues outnumbered decliners by a 1.47-to-1 ratio on the NYSE, with 174 new highs and 42 new lows. On the Nasdaq, 2,780 stocks rose against 1,873 declines, showcasing a 1.48-to-1 ratio in favor of advancers.
As the Federal Reserve’s decisions loom, market participants are poised for significant movements in the coming days. Stay tuned for updates as this developing story unfolds.
