U.S. stocks traded mixed on Monday as investors weighed Federal Reserve Chair Jerome Powell’s signals of a possible near-term interest rate cut and looked ahead to Nvidia’s earnings later this week. The market paused after a strong rally on Friday, when Powell suggested the central bank may consider easing policy at its September meeting due to signs of labor market weakness.
Economic Outlook and Fed Signals
Powell’s remarks spurred speculation that the Fed could lower borrowing costs by 25 basis points next month. Major banks including Barclays, BNP Paribas, and Deutsche Bank now expect a September cut. Traders priced in an 81.9% probability of the move, according to LSEG data. Still, Powell cautioned that a dovish stance was not guaranteed, with upcoming inflation and employment reports playing a critical role. The Fed’s preferred inflation measure, the Personal Consumption Expenditures Price Index, will be released Friday, followed by nonfarm payrolls data next week.
Market Performance
By late morning, the Dow Jones Industrial Average fell 0.52%, or 238.55 points, to 45,393.19. The S&P 500 dipped 0.09% to 6,460.88, while the Nasdaq Composite gained 0.25% to 21,550.58. Seven of the 11 S&P sub-sectors declined, with consumer staples, healthcare, and utilities each sliding about 1% as Treasury yields inched higher. Despite Monday’s caution, last week’s momentum had lifted the Dow to its first record high since December 2024 and fueled the S&P 500’s strongest daily gain since May.
Corporate Highlights
Technology shares were boosted by Nvidia, which rose 1.8% ahead of its earnings report on Wednesday. Investors are watching closely to see if the company’s $4 trillion valuation is supported by its results and how a new revenue-sharing deal with the U.S. government may impact forecasts. Intel added 1.1% after President Donald Trump announced the U.S. government would take a stake in the chipmaker and pursue similar deals with other firms.
Meanwhile, consumer stocks struggled. Keurig Dr Pepper slid 7.7% after agreeing to acquire JDE Peet’s for $18.4 billion in cash. Furniture retailers RH and Wayfair both fell about 5% following Trump’s announcement of an investigation into furniture import tariffs. Declining issues outnumbered advancers by nearly two-to-one on the NYSE and Nasdaq.
Wall Street’s mixed start to the week reflects both optimism about potential Fed easing and caution over upcoming earnings and economic data. While technology stocks provided support, tariff-related concerns and sector declines signaled ongoing uncertainty. Investors now await Nvidia’s results and the Fed’s preferred inflation gauge for clearer direction on markets heading into September.
