S&P and Nasdaq up to kick off holiday-shortened week

Stocks in the US were mixed as the holiday-shortened week began, with the S&P 500 edging up 0.1% to notch a fresh record high, while the Nasdaq gained 0.4% and the Dow Jones slipped by about 80 points.

S&P and Nasdaq up to kick off holiday-shortened week

The cautious yet positive sentiment in equities reflected a mix of geopolitical developments, central bank policy expectations, and corporate news that shaped investor outlooks. Markets were buoyed by growing optimism over a potential resolution to the war in Ukraine, following the first high-level talks between the US and Russia on the conflict since Russia’s 2022 invasion. The prospect of de-escalation lifted sentiment, with investors hopeful that an eventual peace agreement could help stabilize global energy markets, ease supply chain disruptions, and reduce broader economic uncertainty.

Eyes on Fed officials remarks

Meanwhile, traders closely monitored remarks from Federal Reserve officials, which reinforced expectations that interest rates would remain unchanged in the near term. With inflation showing signs of moderation and the labor market still resilient, policymakers signaled a wait-and-see approach rather than an imminent rate cut. Attention now turns to the release of the Federal Open Market Committee (FOMC) minutes on Tuesday, which investors expect will provide further insights into the central bank’s policy direction and its assessment of economic risks.

Sector performance was mixed

Sector performance was mixed, with tech and utilities leading gains, while consumer staples lagged behind. The strength in technology stocks was driven in part by strong corporate news, including a surge in Intel shares, which jumped over 5% following reports that Taiwan Semiconductor Manufacturing Company (TSMC) and Broadcom were considering investments in the company. Such a move would be seen as a significant vote of confidence in Intel’s efforts to expand its semiconductor manufacturing capabilities amid increasing global demand for chips. Elsewhere, concerns over consumer spending trends weighed on defensive sectors such as consumer staples, as investors weighed the impact of persistent inflation on household purchasing power. Additionally, the upcoming earnings reports from major retailers later in the week are expected to provide further clues about consumer sentiment and spending patterns in the current economic climate.