Nasdaq composite index reaches record high

Record High
Record High

U.S. stock indexes drifted amid mixed trading Monday, ahead of this week’s upcoming Federal Reserve meeting that could set Wall Street’s direction into next year. The S&P 500 rose 0.4%, coming off its recent gains. The Nasdaq composite climbed 1.2% to a record, while the Dow Jones Industrial Average fell 110 points, or 0.3%.

Broadcom leaped 11.2% to help lead the S&P 500 for a second straight day after delivering a profit report last week that beat analysts’ expectations. The technology company is riding a wave of enthusiasm about its artificial-intelligence offerings in particular. The market’s main event will arrive on Wednesday when the Federal Reserve announces its last move on interest rates for the year.

The widespread expectation is that it will cut its main rate for a third straight time, as it tries to boost the slowing job market after getting inflation nearly all the way down to its target of 2%. The question is how much more it will cut rates next year, and Fed officials will release projections for where they see the federal funds rate ending 2025, along with other economic indicators, once their meeting concludes. Fed Chair Jerome Powell will also answer questions in a press conference following the meeting.

For now, the general expectation among traders is that the Fed may cut rates a couple more times in 2025, according to data from CME Group. But such expectations have been shrinking following recent data suggesting inflation may be tougher to get all the way down to 2%. Besides last month’s slight acceleration in inflation, another worry is that President-elect Donald Trump’s preferences for tariffs and other policies could lead to higher inflation down the line.

Goldman Sachs economist David Mericle has dropped his earlier forecast of a cut by the Fed in January, for example. Beyond the possibility of tariffs, he said Fed officials may also want to slow their cuts because of uncertainty about exactly how low rates need to go so that they no longer press the brakes on the economy. Expectations for a series of cuts to rates by the Fed have been one of the main reasons the S&P 500 has set an all-time high and is heading for substantial gains.

The economy has held up better than many feared, continuing to grow even after the Fed hiked the federal funds rate to a two-decade high in hopes of grinding down inflation, which topped 9% two summers ago.

Nasdaq reaches new record high

On Wall Street, MicroStrategy jumped as much as 7% during the day as it continues to benefit from the surge in bitcoin, which set another all-time high.

But its stock ended the day down by less than 0.1% after bitcoin’s price pulled back below $106,000 after setting a record above $107,700, according to CoinDesk. The software company has been building its hoard of the cryptocurrency, and its stock price has more than sextupled this year. It will also soon join the Nasdaq 100 index.

Bitcoin’s price has catapulted from roughly $44,000 at the start of the year, riding a recent wave of enthusiasm. Honeywell rose 3.7% after saying it’s still considering a spin-off or sale of its aerospace business, as part of a review of its overall business. It plans to give an update with the release of its fourth-quarter results.

Meanwhile, Nvidia’s stock fell 1.7%. Because it’s grown so massive, with a total value topping $3 trillion, it was the single heaviest weight on the S&P 500. All told, the S&P 500 rose 22.99 points to 6,074.08.

The Dow Jones Industrial Average fell 110.58 to 43,717.48, and the Nasdaq composite rose 247.17 to 20,173.89. In the bond market, Treasury yields held relatively steady. The yield on the 10-year Treasury edged down to 4.39% from 4.40% late Friday.

The two-year yield, which more closely tracks expectations for the Fed, eased to 4.24% from 4.25%. In stock markets abroad, indexes fell modestly across much of Europe and Asia. They sank 0.9% in Hong Kong and 0.2% in Shanghai after reported lackluster economic indicators for November despite attempts to strengthen the world’s second-largest economy.

South Korea’s Kospi fell 0.2%.

Adria Woodman

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