Stocks fell on Monday as investors reassessed expectations for interest rate cuts this year following a strong U.S. jobs report. The S&P 500 erased an earlier fall to rise 0.2%, while the Dow Jones Industrial Average climbed 0.9%. However, weakness in Big Tech stocks dragged the Nasdaq composite down 0.4%.
Nvidia, Apple, and Meta Platforms were among the heaviest weights on the market due to their large size. Macy’s fell 8.1% after announcing revenue for the last quarter of 2024 may be at or slightly below its forecasted range. Edison International dropped another 11.9% as wildfires continue to burn in its Southern California utility’s territory.
Oil-and-gas companies saw gains as crude prices rose. Exxon Mobil gained 2.6%, and Valero Energy jumped 4.9%. U.S. Steel rallied 6.1% after the Biden administration pushed back the deadline for its proposed acquisition by Japan’s Nippon Steel.
Investors reassess amid inflation fears
Intra-Cellular Therapies soared 34.1% after Johnson & Johnson announced plans to buy the company for $132 per share in cash. Treasury yields ticked higher, with the 10-year yield rising to 4.78%.
A report on Wednesday is expected to show inflation accelerated slightly to 2.8% in December. Upcoming earnings reports from major banks will also be in focus this week. Global stocks fell as well, with indexes down across most of Europe and Asia.
Energy prices have added to concerns about rising inflation, as crude oil topped $80 a barrel and European natural gas prices have risen 4% in the last month. Traders have scaled back expectations for Fed rate cuts to just 25 basis points for all of 2025. The dollar hit 26-month peaks, with the pound particularly hard hit, down 4.4% over the last two months.
The euro touched its lowest since November 2022. Oil prices rose another 2% after a drop in Russia’s seaborne exports fueled supply concerns.
