Markets take cautious stance
U.S. stocks retreated on Monday as investors positioned themselves ahead of the consumer price index (CPI) release, a data point that could heavily influence the Federal Reserve’s next policy moves. The Dow Jones Industrial Average shed 200.52 points, or 0.45%, closing at 43,975.09. The S&P 500 dipped 0.25% to 6,373.45, while the Nasdaq Composite slid 0.3% to 21,385.40. Analysts noted muted trading activity, with volumes well below the 20-day average, underscoring the market’s wait-and-see approach.
Fed policy under scrutiny
Market participants are factoring in about 60 basis points of rate cuts by December, according to LSEG data. Eric Teal, CIO at Comerica Wealth Management, cautioned that tariff-driven inflation could keep prices elevated longer than anticipated. “The Fed will need clear signs of weaker inflation and slowing growth before easing borrowing costs more aggressively,” he said. Labor market weakness and leadership changes at the Fed have added further uncertainty to the policy outlook.
Semiconductors face geopolitical test
Chipmakers were in focus as fresh U.S.-China tensions surfaced. Reports suggested Nvidia and AMD had agreed to remit 15% of advanced chip revenues from Chinese sales back to the U.S. government. The unprecedented measure could weigh on corporate margins and potentially set a template for taxation of other sensitive exports. Shares reflected the concern: Nvidia eased 0.35% while AMD fell 0.28%.
Separately, President Donald Trump extended a 90-day pause on higher tariffs for Chinese imports, delaying the expiration of a major trade agreement. Trump praised Beijing’s cooperation in remarks at the White House, but analysts warned the extension was a temporary reprieve rather than a long-term solution.
Notable stock moves
Despite overall weakness, several individual names stood out. Micron Technology climbed 4% after raising fourth-quarter revenue and profit guidance. Intel gained 3.5% amid reports that CEO Lip-Bu Tan had visited the White House, days after Trump publicly criticized his leadership. TKO Group surged 10% as Paramount secured a $7.7 billion deal for exclusive UFC distribution rights over seven years, cementing its role in sports entertainment.
Market breadth and technicals
Declining issues outpaced advancers on both the NYSE and Nasdaq, with ratios of 1.18-to-1 and 1.24-to-1, respectively. The S&P 500 logged 15 new 52-week highs against 17 lows, while the Nasdaq saw 73 highs and 121 lows. Total volume reached 15.5 billion shares, notably below the recent 20-session average of 18.3 billion, reflecting the subdued mood ahead of Tuesday’s critical inflation reading.
