The Dow Jones Industrial Average dipped Monday to kick off the second quarter, with traders weighing fresh U.S. inflation data amid fears the market rally could slow down. The 30-stock Dow Jones Industrial Average lost 240.52 points, or 0.6%, and settled at 39,566.85. The S&P 500 dipped 0.2% to close at 5,243.77. The tech-heavy Nasdaq Composite, on the other hand, added 0.11% to finish at 16,396.83. Investors remain cautious about the pace of the Federal Reserve`s rate-cutting timeline this year and how soon central bankers will be able to meet their 2% inflation target. Federal Reserve Chair Jerome Powell said Friday that economic growth remains strong and inflation is still above target. "That means we don`t need to be in a hurry to cut," the central bank chief told public radio`s "Marketplace" program. "The economy is strong right now, and the labor market is strong right now. And inflation has been coming down. We can and we will be careful about this decision because we can be." Indeed, fed funds futures data suggests a 58% probability that the central bank will cut rates at its June meeting, according to the CME FedWatch Tool. Treasury yields rose Monday as investors considered Powell`s earlier remarks and a key inflation reading. The benchmark 10-year Treasury yield was last up nearly 13 basis points at 4.319%. Traders reacted to the personal consumption expenditures price index, released during the market`s closure for Good Friday. Core PCE, which excludes food and energy, showed inflation rose 2.8% on a 12-month basis in February, in line with expectations. On a monthly basis, the measure was up 0.3% from a month ago, the Commerce Department said. The major averages are coming off a winning first quarter. The S&P 500 jumped 10.2% for its best first-quarter performance since 2019, while the Dow Jones Industrial Average added 5.6%. The Nasdaq Composite popped 9.1%. Wall Street also wrapped up a winning March, extending its rally to a fifth straight month. Those monthly and quarterly gains brought the Dow to within striking distance of 40,000. However, Monday`s decline pulled it away from the milestone level. "The market is overbought by any measure," said Quincy Krosby, chief global strategist at LPL Financial. "At some point, we will see a pullback, and then at that point, you`ll start to hear the bears come out again suggesting that it`s deeper than just a healthy correction." "The market needs a correction in order to start seeing more money come in from money market accounts and to feel more constructive," Krosby added. Correction: The S&P 500 had its best first-quarter performance since 2019. A previous version misstated the milestone. Stocks closed Monday mostly lower. The S&P 500 dipped 0.2% to settle at 5,243.77. The 30-stock Dow Jones Industrial Average lost 240.52 points, or 0.6%, and settled at 39,566.85. The tech-heavy Nasdaq Composite, on the other hand, added 0.11% to finish at 16,396.83. — Pia Singh The global economy and foreign stock markets are starting to wake up, according to Bank of America. The U.S. was one of the few strong economies and markets in 2023, but that appears to be changing in the new year. Quant strategist Nigel Tupper said in a note to clients that the MSCI AC World Index is up more than 7% after the first quarter and that the "global wave," a compilation of economic indicators, is on the upswing. Meanwhile, the Swiss National Bank lowered its benchmark interest rate last month, becoming the first of what is expected to be several major central banks to cut rates this year. "The rare combination of improving data and easier policy is a powerful set up for global equity markets," the note said. — Jesse Pound, Michael Bloom Small-cap stocks got hit particularly hard during Monday`s session. The small-cap-focused Russell 2000 dropped 1% during afternoon trading. By comparison, the broad S&P 500 has lost just 0.3%. The Russell 2000 has underperformed so far in 2024, gaining less than 4%, while the S&P 500 has added around 9%. — Alex Harring On Thursday afternoon, the S&P 500 settled at a new all-time record high. That means the 500-stock index has now closed in on overbought territory for 50 consecutive trading days, according to a tweet from Bespoke Investment Group. In other words, it has been trading greater than one standard deviation away from its 50-day moving average for the last 50-day period. This is the first time the S&P 500 has reached such a status in more than 25 years. The last time it notched a longer record of overbought closes was April 1998, with a 60-day streak. — Lisa Kailai Han Bitcoin fell to start the new month and quarter, dragging crypto equities down with it. The price of the cryptocurrency was last lower by 3.5% at $68,477.88, according to Coin Metrics, as Treasury yields jumped and the dollar rose, following data that showed growth in the manufacturing sector for
Tags: Dow Jones Industrial Average, Stock, Stock market, S&P 500, Nasdaq