U.S. Stocks May Show A Lack Of Direction Ahead Of Fed Meeting

After reaching their best closing levels in well over a year last Friday, stocks may show a lack of direction in early trading on Monday. The major index futures are currently pointing to a roughly flat open for the markets, with the S&P 500 futures down by less than a tenth of a percent.

Traders may be reluctant to make significant moves ahead of the Federal Reserve’s monetary policy announcement on Wednesday.

With the Fed widely expected to leave interest rates unchanged, traders are likely to focus more closely on the central bank’s accompanying statement and projections.

Reports on consumer and producer price inflation are also likely to attract attention in the coming days along with reports on retail sales and industrial production.

Optimism the Fed could pivot to cutting interest rates as soon as March 2024 has contributed to the recent strength on Wall Street.

Among individual stocks, chares of Macy’s (M) are moving sharply higher in pre-market trading following reports an investor group consisting of Arkhouse Management and Brigade Capital has offered to acquire the department store chain for $5.8 billion.

Health insurer Cigna (CI) is also seeing substantial pre-market strength after reportedly abandoning efforts to acquire rival Humana (HUM) and announcing a $10 billion increase in its share repurchase authorization.

Stocks fluctuated early in the trading day on Friday but moved mostly higher over the course of the session. The major averages added to the gains posted during Thursday’s session, reaching their highest closing levels in well over a year.

The major averages reached new highs late in the session but gave back some ground going into the close. The Dow rose 130.49 points or 0.4 percent to 36,247.87, the Nasdaq advanced 63.98 points or 0.5 percent to 14,403.97 and the S&P 500 climbed 18.78 points or 0.4 percent to 4,604.37.

For the week, the Dow inched marginally higher, the S&P 500 edged up by 0.2 percent and the Nasdaq increased by 0.7 percent.

In overseas trading, stock markets across the Asia-Pacific region moved mostly higher during trading on Monday. Japan’s Nikkei 225 Index jumped by 1.5 percent and China’s Shanghai Composite Index climbed by 0.7 percent, although Hong Kong’s Hang Seng Index bucked the uptrend and slid by 0.8 percent.

Meanwhile, the major European markets are turning in a mixed performance on the day. While the U.K.’s FTSE 100 Index is down by 0.5 percent, the German DAX Index is up by 0.1 percent and the French CAC 40 Index is up by 0.4 percent.

In commodities trading, crude oil futures are inching up $0.02 to $71.25 a barrel after surging $1.89 to $71.23 a barrel last Friday. Meanwhile, after plunging $31.90 to $2,014.50 an ounce in the previous session, gold futures are slipping $3.40 to $2,011.10 an ounce.

On the currency front, the U.S. dollar is trading at 146.30 yen versus the 144.95 yen it fetched at the close of New York trading on Friday. Against the euro, the dollar is trading at $1.0758 compared to last Friday’s $1.0763.

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