The Dow hit an intraday record high, but technology stocks weighed on the S&P 500 and the Nasdaq on Monday ahead of the Federal Reserve’s pivotal monetary policy decision, due later in the week.
In recent trading, the Dow Jones Industrial Average gained 121 points, or 0.3%, to 41,515. The blue-chip index had soared more than 300 points to set an intraday record of 41,733.97.
The S&P 500 lost 0.3%, and the Nasdaq dropped 1%.
Rate-sensitive chip stocks fell, with Nvidia, which led much of this year’s rally, down 2%, Broadcom dropping 2.2% and Qualcomm losing 1.5%, sending the Philadelphia SE Semiconductor index lower by 1.7%.
Other growth stocks also took a hit. Amazon lost 0.70% and Tesla fell 1.7%. Apple slid 3.2% after an analyst at TF International Securities said demand for its latest iPhone 16 models was lower than expected.
Markets have been in a bull run since the start of this year on expectations the world’s most influential central bank would kick off its monetary policy easing cycle soon.
The benchmark index and the tech-heavy Nasdaq notched their biggest weekly jumps in about 11 months on Friday, although analysts attributed the optimism to signs of a robust economy rather than rate-cut expectations.
Following a diverse batch of economic reports and comments from a former policymaker in the last few weeks, traders swayed in their bets on what decision the central bank would arrive at during its Sept. 17 to 18 meeting.
Odds for a 50-basis-point cut are at 61% from 30% a week ago, according to the CME FedWatch Tool, which showed a 39% probability of a 25-basis-point reduction. There is concern that an outsized move could mean the Fed sees the economy cooling at a faster-than-anticipated pace.
“Influential investors have been talking about the need for a 50-basis-point cut and we’re seeing increased talk of recession risks. As a result, there’s betting that we will get something other than the 25-bps cut,” said Sam Stovall, chief investment strategist at CFRA Research.
“It would be a good thing for the Fed to imply that they are ahead of the curve.”
Among other movers, Intel climbed 2.7% after a report showed the chipmaker has officially qualified for as much as $3.5 billion in federal grants to make semiconductors for the Department of Defense.
In economic data, reports on retail sales, weekly jobless claims, housing starts and industrial production are due through the week.