Investing.com-- U.S. stocks traded in a mixed fashion Monday, with investors awaiting a Federal Reserve meeting, more tech earnings and a crucial labor report during the week.
At 09:35 ET (13:35 GMT), the Dow Jones Industrial Average fell 75 points, or 0.2%, while the S&P 500 climbed 8 points, or 0.2%, and the NASDAQ Composite gained 80 points, or 0.5%.
Fed meeting set to provide rate cut clarity
The U.S. Federal Reserve concludes its latest meeting on Wednesday, and is widely expected to keep interest rates unchanged.
Investors will be watching for signals from the central bank that it plans to begin cutting interest rates shortly, amid increasing signs that inflation had cooled in recent months.
Recent comments from Federal Reserve officials signal they will likely remain on hold at their upcoming meeting, but the prospect of a first interest rate cut has become more probable, according to Goldman Sachs (NYSE:GS) economists.
The primary factor moving the FOMC closer to a cut is the favorable inflation data from May and June. After firmer inflation figures in the first quarter—attributed largely to residual seasonality and typical month-to-month noise—the second quarter saw significant improvement in inflation news.
Traders were seen pricing in a 25 basis point cut by the Fed in September, CME Fedwatch showed.
Apple, Microsoft to report this week
Earnings reports from some of Wall Street’s biggest companies are also on tap this week, with Microsoft (NASDAQ:MSFT) and Apple (NASDAQ:AAPL) set to report on Tuesday and Thursday, respectively.
Other tech majors including Meta Platforms (NASDAQ:META), Advanced Micro Devices (NASDAQ:AMD) and Amazon (NASDAQ:AMZN) are also set to report earnings through the week.
The results come in the wake of an extended rout in technology stocks, as the sector was walloped by profit-taking and as expectations of rate cuts saw investors pivot into more economically sensitive sectors.
Underwhelming earnings from Alphabet (NASDAQ:GOOGL) last week also sparked increased caution ahead of the tech earnings, with investors waiting to see whether increased investment in artificial intelligence was bearing fruit.
As far as Monday is concerned, McDonald’s (NYSE:MCD) stock rose 0.2% in choppy trading after it reported a surprise drop in quarterly global comparable sales.
Labor market in focus
The week's main economic data release will be Friday's nonfarm payrolls number, with economists expecting the U.S. economy to have created 177,000 jobs in July, moderating from 206,000 in the prior month.
That said, there are a raft of employment reports through the week, such as the Job Openings and Labor Turnover Survey, ADP Employment and weekly jobless claims, due ahead of that which will also be scrutinized for concrete clues on an easing labor market.
Crude slips despite heightened Middle East tensions
Crude prices edged higher Monday amid concerns of a widening conflict in the Middle East, potentially impacting global supply.
By 09:35 ET, the U.S. crude futures (WTI) climbed 0.4% to $77.50 a barrel, while the Brent contract rose 0.3% to $80.52 a barrel.
A deadly rocket strike in the Israeli-occupied Golan Heights over the weekend has been blamed by both Israel and the U.S. on Iran-backed Hezbollah, who have denied responsibility for the attack.
Israel has vowed retaliation against Hezbollah in Lebanon, and Israeli jets hit targets in southern Lebanon on Sunday.
These increasing tensions are also seen diminishing the prospect of a ceasefire between Israel and Hamas.
However, the crude market remains weak as demand remains threatened by global economic weakness.
(Ambar Warrick contributed to this article.)