(Bloomberg) — US stocks and bonds wavered on Monday as traders awaited remarks from the Federal Reserve Chair later in the session.
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S&P 500 was little changed with declines in Amazon.com Inc. and Nvidia Corp. weighing on the benchmark index. Despite Monday’s weakness, a record-setting rally has put the equities gauge on track for its fourth consecutive quarter of gains — the longest such winning stretch since 2021.
Treasury yields climbed, led by the policy-sensitive two-year note. US government bonds are on track to end September with a historic fifth-straight monthly gain.
Atlanta Federal Reserve President Raphael Bostic told Reuters he was open to another half-percentage-point interest rate cut at the central bank’s November meeting if the upcoming data showed slower-than-expected job growth.
Investors will also be tuning in for remarks by Fed Chair Jerome Powell on Monday when he takes the stage at a National Association for Business Economics conference.
“Powell won’t end the 25 bp versus 50 bp debate this afternoon. Or at least it is very unlikely,” according to BMO’s Ian Lyngen. Friday’s employment report is the main event this week, he noted, adding Tuesday’s JOLTS figures from August “should reinforce the idea that a cooling labor market has become the new norm.”
To Goldman Sachs Group Inc. strategists led by David Kostin, a strong print Friday may help fuel risk-on bets and embolden investors to move “out of expensive ‘quality’ stocks into less-loved lower quality firms.”
As investors gauge the outlook for Fed rate cuts, investors must ponder a cocktail of risks, including rising tensions in the Middle East and a looming dockworkers’ strike in critical US ports. The relentless rally in stocks will also be tested by third-quarter corporate results set to kick off in mid-October.
“The bull market has survived the year’s historically weakest quarter, the third quarter, and it is likely to remain intact through at least the end of the year, as earnings remain strong, interest rates are moving lower and…
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