NEW YORK (AP) — U.S. stocks are drifting in mixed trading Monday, offering a break from their whipsaw moves in recent weeks.
The S&P 500 was down 0.2% in early trading. It’s just 0.9% below its all-time high set in July, but only after rushing from its worst week in nearly 18 months into its best week of the year.
The Dow Jones Industrial Average was up 246 points, or 0.6%, and on track to set a record. The Nasdaq composite was 1.1% lower, as of 9:35 a.m. Eastern time.
Alcoa jumped 5.9% after saying it would sell its ownership stake in a Saudi Arabian joint venture to Saudi Arabian Mining Co. for $950 million in stock and $150 million in cash. Drops for Big Tech stocks dragged on indexes, though, including declines of 3.7% for Apple and 3.8% for Nvidia. They’re among the market’s most influential because they’re among the most valuable.
Treasury yields were edging lower in the bond market ahead of what’s expected to be the week’s main event. On Wednesday, the widespread expectation is for the Federal Reserve to cut its main interest rate for the first time in more than four years to deliver some relief to the economy.
The only question is by how much the Fed will cut. Traders are shifting more bets toward a larger-than-usual move of half a percentage point, according to data from CME Group. They’re anticipating a 63% chance the Fed will go beyond the more traditional cut of a quarter of a percentage point. That’s up from 50% on Friday and just 30% a week ago.
The difference between a half-point cut and a quarter may sound academic but can have far-ranging effects. While lowering rates relieves pressure on the economy, it can also give inflation more fuel.
The Federal Reserve has been keeping its main interest rate at a two-decade high in hopes of slowing the economy enough to stifle high inflation. With inflation having eased substantially from its peak two summers ago, the Fed has said it can turn more focus to bolstering the slowing job market and economy.
In the bond market, the yield on the 10-year Treasury edged down to 3.64% from 3.66% late Friday. The two-year yield, which moves more closely with expectations for the Fed, fell a bit more and eased to 3.55% from 3.59%.
That was despite a report in the morning showing manufacturing in New York state returned to growth in September. That surprised economists, who were expecting another month of contraction for an area of the economy that’s been hit hard by high interest rates.
In stock markets abroad, indexes were mixed amid modest movements across Europe and Asia. Hong Kong’s Hang Seng added 0.3% after data released over the weekend showed China’s economy slowed further in August.
Markets in Japan, mainland China and South Korea were closed for holidays.