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on monday, eastern time, the three major u.s. stock indexes closed mixed as investors assessed the possibility of a sharp interest rate cut by the federal reserve this week.

this week, the federal reserve is preparing to cut interest rates for the first time since 2020, and the market currently expects a 59% chance of a 50 basis point cut.

investors’ aversion to uncertainty has been on display since early august, when signs of weakness in the u.s. job market sparked a debate over whether the federal reserve had missed the time to cut interest rates. now uncertainty about the extent of the cut is again roiling markets.

former new york fed president william dudley said on monday that the fed faces a key decision at this week's meeting: whether to moderately cut interest rates by 25 basis points or directly cut interest rates by 50 basis points to curb the economic recession. he himself pointed out at the bretton woods committee meeting in singapore last friday that the logic of cutting interest rates by 50 basis points is more convincing.

several media outlets have also reported that while there is not much evidence that a recession is imminent, the labor market has cooled, even to the point of being cold, and the federal reserve should cut interest rates by 50 basis points.

meanwhile, three democratic senators, including warren, wrote to powell asking him to slash the benchmark interest rate, including a 75 basis point cut this week, to protect the u.s. economy from potential harm.

david kelly, chief global strategist at jpmorgan asset management, said the fed's rate decision this week may not resolve a core question facing the market, which is how many rate cuts are expected for the rest of the year. when fed officials last released their forecasts, they expected only 25 basis points of rate cuts in 2024. but even if the fed's new forecast is adjusted to two rate cuts this year, it will still be far below traders' expectations.

"we remain bullish on stocks, and rotation has eased market volatility multiple times since the s&p 500 bottomed out last year," said john stoltzfus, an analyst at oppenheimer asset management. "most of the pullbacks so far this year look like trimming and pruning of the s&p 500."

market dynamics

as of the close, the dow jones industrial average rose 228.30 points, or 0.55%, to 41,622.08; the nasdaq fell 91.85 points, or 0.52%, to 17,592.13; and the s&p 500 rose 7.07 points, or 0.13%, to 5,633.09.

the 11 sectors of the s&p 500 index generally closed higher, with the financial sector closing up 1.22%, the energy sector up 1.2%, the materials and telecommunications sectors up about 0.9%, the discretionary consumer sector down 0.32%, and the information technology/technology sector down 0.95%.

most of the us stock industry etfs closed higher, with the financial industry etf, regional bank etf, banking industry etf and energy industry etf each rising by more than 1%, and the utility etf, medical industry etf and internet stock index etf each rising by at least 0.5%. the semiconductor etf fell by more than 1%, and the global technology stock etf fell by more than 0.5%.

hot stock performance

large technology stocks were mixed, with nvidia and tesla falling more than 1%, amazon and netflix falling slightly, meta rising more than 1%, microsoft and google rising slightly, and intel rising more than 6%. the company confirmed that it was eligible for a $3 billion department of defense chip act grant, confirming previous reports.

apple fell nearly 3%. previously, well-known apple analyst ming-chi kuo said that based on the latest supply chain survey and pre-order results on apple's official website, the first-week pre-order sales of the iphone 16 series are expected to be 37 million units, a decrease of about 12.7% compared with last year's 15 series.

trump media & technology group fell nearly 4%. trump was hit by an assassination attempt while playing golf in florida on the 15th. trump is fine and the suspect has been detained.

most of the popular chinese concept stocks fell, with the nasdaq china golden dragon index falling 0.58%. nio fell more than 2%, alibaba and bilibili fell more than 1%, netease, weibo, xpeng motors, li auto, tencent music, and futu holdings fell slightly. pinduoduo rose more than 2%, manbang rose more than 1%, baidu, vipshop, and jd.com rose slightly.

company news

[intel and amazon will expand strategic cooperation in chip manufacturing]

intel and amazon web services (aws) said on monday they would expand their collaboration to include joint investments in custom chip design under a multi-year, multibillion-dollar framework. as part of the collaboration, intel will produce artificial intelligence fabric chips for aws on its most advanced process node, intel 18a. the company also said it plans to establish intel foundry as an independent subsidiary of intel.

[apple: ios 18 is expected to introduce apple smart features starting next month]

apple said that ios 18 is now available and is expected to introduce apple smart features starting next month; vos 18 is now available as a free software update for apple tv 4k and apple tv hd; watchos 11 will be launched on september 16.

[microsoft and vodafone sign ai office agreement]

microsoft announced a major deal with vodafone group to use its ai assistant in office and unveiled a slew of new ai tools designed to help employees create excel charts, prioritize emails and collaborate with each other. in a blog post published ahead of a webcast on monday, microsoft said vodafone will buy 68,000 licenses for the enterprise version of the assistant, called copilots, after initial trials found that employees who used the assistants could save about three hours per week.

[boeing freezes hiring to cut costs amid strike]

boeing announced sweeping cost cuts, including a hiring freeze and suspension of nonessential employee travel, as well as considering temporary unpaid furloughs to preserve cash in response to a strike by more than 30,000 boeing factory workers, who went on strike last friday after more than 30,000 boeing factory workers overwhelmingly voted down a new contract. "we are working in good faith to reach a new contract agreement that reflects their feedback and restore operations," chief financial officer brian west said in a staff note monday. "however, our business is going through a difficult time. this strike jeopardizes a significant portion of our recovery, and we must take the necessary actions to preserve cash and safeguard our shared future."