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US Session Market-Wrap: Energy Sector on the Rise, While Tech Giants Lose Ground

A new wave of buying during the dip supported the recovery of stocks from their daily lows, following a sell-off triggered by a reassessment of expectations for the Federal Reserve’s policy. The S&P 500 index rose, erasing a decline that had previously reached nearly 1% earlier on Monday. Energy producers joined the rally in oil prices, while banks saw gains ahead of the earnings season. This happened despite the decline in tech giants like Nvidia Corp. and Apple Inc. The bond market showed small movements following a recent sell-off, during which traders reduced their expectations for interest rate cuts due to concerns over persistently high price pressures.

A new wave of buying during the dip helped stocks recover from their daily lows, following a sell-off caused by a reassessment of bets on the Federal Reserve’s policy.

The S&P 500 index rose, erasing a decline that earlier on Monday had nearly reached 1%. Energy producers joined the oil price rally, while banks saw growth ahead of the earnings season. This happened despite the downturn in tech giants like Nvidia Corp. and Apple Inc. The bond market showed small movements following a recent sell-off, in which traders reduced their expectations for interest rate cuts due to concerns over persistent high inflation pressures.

“Even inflation data this week, which is lower than expected, will not convince the Federal Reserve to implement another interest rate cut this month. However, it could help ease some of the bearish sentiment, as well as a good start to the earnings season,” commented Morgan Stanley. According to Chris Larkin of E*Trade and Kali Cox of Ritholtz Wealth Management, although analysts are drastically lowering earnings forecasts, the extent of these adjustments is unusual, and earnings reports in the coming weeks could help stabilize the market.

“Profits are a reminder of how we got here,” noted Cox. “It’s so important to remember how encouraging the current story about the economy is. High expectations made us trip, but this dip could attract a lot of buyers simply because the fundamentals are strong.”

The S&P 500 index remained nearly unchanged. The Bloomberg Nasdaq 100 Index fell by 0.6%. The Dow Jones Industrial Average rose by 0.7%. The “Magnificent Seven” of the largest companies fell by 1%. The Russell 2000, which covers smaller companies, retreated by 0.2%. The yield on 10-year government bonds increased by three basis points to 4.79%. The Bank of England successfully sold £750 million ($911 million) in bonds, despite recent market turmoil. The Bloomberg Dollar Spot Index fluctuated, reaching its highest level in the past five months.

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