U.S. stocks traded cautiously on Monday as investors paused after two consecutive weeks of gains. Markets shifted their focus to this week’s Federal Reserve meeting, where policymakers are widely expected to cut interest rates.
By 09:32 ET (14:32 GMT), the Dow Jones Industrial Average slipped 98 points, or 0.2%. The S&P 500 edged up 2 points, or 0.1%, while the Nasdaq Composite added 98 points, or 0.4%. All three major indexes ended last week higher, marking their second straight week of gains.
Caution builds ahead of the Fed decision
The generally positive market tone has been supported by expectations that the Fed will ease monetary policy on Wednesday. Last week’s delayed release of September’s core PCE index — the Fed’s preferred inflation measure — showed weaker-than-expected price pressures, reinforcing the case for a rate cut.
Signs of a cooling labor market and slower consumer spending have also strengthened expectations for monetary support. Economic data was limited on Monday, but Tuesday’s JOLTS job openings report may attract more attention now that the monthly U.S. jobs report will be released after the Fed meeting.
According to the CME FedWatch tool, futures markets are pricing in an 88% probability of a rate cut. Investors will closely analyze the Fed’s policy statement and its projections for 2026 to understand how far policymakers are prepared to go.
Analysts at ING noted that the key question is what guidance the Fed will provide for next year. They said the most dovish outcome might include a second rate cut penciled into the 2026 forecast, although they believe the Fed will likely remain cautious.
Corporate news and earnings in focus
Corporate updates are also set to influence market direction. Several major companies — including Lululemon, Costco, Broadcom, Oracle and Adobe — are scheduled to report earnings this week.
S&P Global announced that Carvana, CRH PLC and Comfort Systems will be added to the S&P 500 index on Dec. 22, a move that often triggers repositioning by index-tracking funds.
In deal news, IBM said it will acquire Confluent for $31 per share in cash, valuing the transaction at around $11 billion.
Netflix’s proposed $72 billion acquisition of Warner Bros. Discovery also remains under scrutiny. President Donald Trump highlighted concerns about market concentration, signaling that regulators may take a tough stance on the deal.
Oil prices slip after recent highs
Oil prices retreated from two-week peaks on Monday as traders looked to the upcoming Fed meeting for direction. Brent crude fell 1.3% to $62.92 per barrel, while West Texas Intermediate dropped 1.4% to $59.23 per barrel. Both benchmarks closed at their highest levels since Nov. 18 on Friday.
Beyond the Fed decision, global energy markets are watching geopolitical developments. Progress toward peace in Ukraine remains limited, and Reuters reported that the G7 and the European Union are discussing replacing the Russian oil price cap with a full maritime services ban — a move that could tighten global supplies further.
