U.S. stocks are mixed as traders pause on the possibility of a rate hike

  • Palo Alto gains on S&P 500 index addition
  • Apple during the developer conference
  • Indexes: S&P 500 -0.03%, Nasdaq +0.10%, Dow -0.38%

June 5 (Reuters) – U.S. stocks were mixed on Monday, with Apple Inc hitting a record high and investors weighing whether the Federal Reserve could pause its interest rate hikes at its upcoming policy meeting.

Apple ( AAPL.O ) rose 0.9% after the world’s most valuable company updated its line of desktop and laptop Macs using its own processor chips ahead of the expected announcement of its first mixed-reality headset. Earlier it had risen to a record high of 2.2%.

Other heavyweight growth stocks also rose, with Alphabet Inc ( GOOGL.O ) up 1.5% and Tesla ( TSLA.O ) up 2% after the electric automaker’s sales of Chinese-made cars rose in May.

US stocks rallied on Friday after a report showed wage growth moderated in May, betting the central bank could avoid an interest rate hike next week, while investors welcomed the Washington deal.

The U.S. services sector grew barely in May as new orders slowed, a survey by the Institute for Supply Management showed, bolstering expectations that the Fed may pause its rate hikes. May help the central bank’s fight against inflation.

According to CME Group’s FedWatch tool, traders are pricing in a nearly 80% chance the central bank will keep interest rates at its June 13-14 policy meeting, though they expect another hike in July.

“That bad news is good news in terms of the Fed. The bad news, which is weak economic reports, is actually good news because it means the Fed is pausing its series of interest rate hikes, which they believe they’ve started doing. The trick is reducing inflation,” said a senior portfolio strategist in New York. said expert Ingalls & Snyder Tim Krysky.

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A stronger-than-expected earnings season and expectations that the Federal Reserve may pause its aggressive monetary tightening cycle have boosted U.S. stock markets in recent months. The S&P 500 was earlier in Monday’s session, briefly on track to close 20% below its October 2022 closing low.

The S&P 500 was last down 0.03% at 4,280.95 points.

The Nasdaq gained 0.10% to 13,253.86 points and the Dow Jones Industrial Average was down 0.38% to 33,634.67.

Palo Alto Networks Inc ( PANW.O ) rose 5.5% as the cybersecurity company looks poised to replace Dish Network ( DISH.O ) in the S&P 500 index. Shares of DISH fell 1.0%.

Big U.S. banks slipped after the Wall Street Journal reported that U.S. regulators were preparing to tighten rules for big banks, including raising their capital requirements by an average of 20%.

Of the 11 S&P 500 sector indexes, six declined, with industrials (.SPLRCI) down 0.59%, followed by a 0.5% loss in financials (.SPSY).

Declining stocks outnumber rising stocks by a 1.3-to-one ratio within the S&P 500 (.AD.SPX).

The S&P 500 posted 16 new highs and three new lows; The Nasdaq posted 85 new highs and 38 new lows.

Reporting by Shruti Shankar and Shruti Achar in Bangalore; Editing by Marguerita Choi

Our Standards: Thomson Reuters Trust Principles.

Shristi Achar A

Thomson Reuters

Shristi is a reporter and is part of the Markets team reporting on equity markets in the US, UK, Canada, Europe and emerging markets.

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