S&P 500 ends lower as traders eye potential pause in rate hikes

S&P 500 ends lower as traders eye potential pause in rate hikes


Apple, Nvidia down during Monday's trading

NEW YORK (Reuters) – The S&P 500 ended lower on Monday as investors weighed whether the US Federal Reserve might pause its interest rate hikes at its upcoming policy meeting, while Apple briefly hit a record high before losing ground.

Apple Inc ended 0.8 per cent lower after the world's most valuable company unveiled an augmented-reality headset called the Vision Pro, its riskiest and biggest bet since the introduction of the iPhone. Earlier Apple rose as much as 2.2pc to an all-time high.

Other heavyweight growth stocks were mixed, with Nvidia Corp dipping 0.4pc and giving back some of its recent gains, and Tesla Inc adding 1.7pc after the electric vehicle maker's sales of China-made cars in China jumped in May.

The S&P 500 on Friday closed at its highest level in over nine months after a report showed that wage growth moderated in May.

Following a stronger-than-expected earnings season and expectations the Fed could pause its aggressive monetary tightening cycle, the

S&P 500 is up nearly 20pc from its closing low in October, lifted by gains in heavyweight tech stocks including Apple, Nvidia and Microsoft Corp.

Reinforcing expectations the Fed could pause its rate hikes, a survey from the Institute for Supply Management showed the US services sector barely grew in May as new orders slowed, pushing a measure of prices paid by businesses for inputs to a three-year low, which could aid the Fed's fight against inflation.

"That bad news is good news in terms of the Fed. The bad news, meaning weak economic reports, is actually good news because it makes it more likely the Fed will pause its series of interest rate hikes, believing they have begun to do their trick bringing inflation down," said Tim Ghriskey, senior portfolio strategist Ingalls & Snyder in New York.

Traders have priced in a nearly 80pc chance that the Fed will hold interest rates at its June 13-14 policy meeting, according to CME Group's FedWatch tool, although they expect another hike in July.

The S&P 500 declined 0.20pc to end the session at 4,273.79 points.

The Nasdaq declined 0.09pc to 13,229.43 points, while Dow Jones Industrial Average declined 0.59pc to 33,562.86 points.

Of the 11 S&P 500 sector indexes, seven declined, led lower by industrials, down 0.71pc, followed by a 0.58pc loss in energy.

Palo Alto Networks Inc climbed 4.4pc, with the cybersecurity firm set to replace Dish Network Corp in the S&P 500 index on June 20. Dish shares fell 2.7pc.

Big US banks slipped after the Wall Street Journal reported that US regulators were preparing to tighten rules for large banks, which could include raising their capital requirements by 20pc on average.

Declining stocks outnumbered rising ones within the S&P 500 by a 1.5-to-one ratio.

The S&P 500 posted 17 new highs and four new lows; the Nasdaq recorded 90 new highs and 54 new lows.

Volume on US exchanges was relatively light, with 9.7 billion shares traded, compared to an average of 10.5 billion shares over the previous 20 sessions.