S&P 500 takes a pause ahead of U.S inflation data…..

The S&P 500 closed Monday’s session slightly down as investors held their breath before a crucial inflation reading that could provide clues as to how long the U.S. Federal Reserve will keep interest rates elevated. After the indexes enjoyed a solid rally on Friday, the market turned its focus on Monday to Consumer Price Index (CPI) data, due out Tuesday morning. Economists expect a headline increase of 3.3% for October, easing from 3.7% in September. But core prices are expected to be unchanged from the previous month. Traders have priced in a nearly 86% chance the Fed holds interest rates steady in December, according to the CME Group’s Fed Watch tool.

Moody’s late on Friday lowered its outlook on the U.S. credit rating to “negative” from “stable”, citing large fiscal deficits and a decline in debt affordability. This added to investor reluctance to make big decisions ahead of a weekend deadline that could potentially result in a U.S. government shutdown, O’Rourke said. U.S. House of Representatives Speaker Mike Johnson unveiled a Republican stopgap spending measure on Saturday aimed at averting a shutdown, but the measure quickly met opposition from lawmakers from both parties in Congress.

According to preliminary data, the S&P 500 <.SPX> lost 4.03 points, or 0.09%, to end at 4,411.51 points, while the Nasdaq Composite <.IXIC> lost 30.36 points, or 0.22%, to 13,767.74. The Dow Jones Industrial Average <.DJI> rose 49.76 points, or 0.15%, to 34,332.86. The major U.S. stock indexes had rebounded so far this month, fueled by a stronger-than-expected earnings season and hopes that U.S. interest rates are near their peak.

Among the S&P 500’s 11 major sectors energy <.SPNY> was the biggest gainer during the session, while utilities <.SPLRCU> was the biggest loser.  Helping keep the Dow afloat, Boeing rallied on Monday after Bloomberg News reported that China is considering resuming purchases of 737 Max aircraft.  And, Dubai’s Emirates placed an order for 90 more Boeing 777X jets at the opening of the Dubai Airshow on Monday.

Med tech companies including Dexcom, Insulet and Abbott rose as analysts discussed data about the cardiovascular benefits for Novo Nordisk’s weight-loss drug Wegovy.

Reporting by Sinéad Carew in New York, Sruthi Shankar and Amruta Khandekar in Bengaluru; Editing by Maju Samuel and Aurora Ellis

© Thomson Reuters 2023. All rights reserved.