Stocks struggled to get off the mat Monday as uncertainty swirled over the magnitude of the upcoming Fed rate cut – as well as the central bank's outlook for interest rates and the economy going forward.
It's all but certain that the Federal Reserve will lower the federal funds rate when it concludes its policy meeting this Wednesday afternoon. The question now is just how large that cut will be.
According to CME Group's FedWatch Tool, futures traders are pricing in a 63% chance for a larger 50 basis-point (0.50%) cut, up from 30% one week ago. Odds for a quarter-point (0.25%) rate cut have fallen to 37% from 70%.
Sign up for Kiplinger’s Free E-Newsletters
Profit and prosper with the best of expert advice on investing, taxes, retirement, personal finance and more - straight to your e-mail.
Profit and prosper with the best of expert advice - straight to your e-mail.
Investors are also on the lookout for the Fed's Summary of Economic Projections, or dot plot, which includes central bankers' expectations for where the interest rates will be over the next few years.
In March, the Fed projected three quarter-point rate cuts by year's end, though in June, this was lowered to reflect expectations of one quarter-point rate cut this year. However, this data is "badly out of date now," says Bill Adams, chief economist at Comerica.
Oracle can rally another 25%, says one analyst
In single-stock news, Oracle (ORCL) jumped 5.1% after Melius Research analyst Ben Reitzes upgraded the cloud software provider to Buy from Hold and lifted his price target to $210 from $155, representing implied upside of nearly 25% to today's close.
"Given higher backlog, prospects for ongoing AI success, and cloud revenue acceleration, we are raising estimates," the analyst wrote in a note, adding that the company's "multicloud deals" with partners such as Amazon.com (AMZN, -0.9%) have a higher margin than the Oracle Cloud (OCI) average.
Today's price surge is just more of the same for the tech stock, which is up 61% for the year to date. More recently, shares have surged almost 22% since last Monday's close, thanks to Oracle's impressive earnings report.
What's more, this red-hot run has made Larry Ellison, co-founder and chief technology officer of Oracle, the second-richest person in the world, sailing past Amazon founder Jeff Bezos but remaining behind Tesla (TSLA, -1.5%) CEO Elon Musk.
Intel jumps, Apple sinks
Intel (INTC) was another notable gainer Monday, rising 6.4% after a Bloomberg report said the chipmaker qualified for federal grants worth up to $3.5 billion. The funding will support the company's domestic factories in producing advanced chips for the Pentagon.
This made Intel the best Dow Jones stock Monday, while mega-cap tech giant Apple (AAPL, -2.8%) was the worst. Weighing on AAPL was news of disappointing iPhone 16 pre-orders.
According to an analyst post on Medium, Apple sold 37 million units of its new iPhone 16 series in the first weekend, down roughly 13% from last year's iPhone 15 first-weekend sales. Demand for the newest Pro series saw the biggest year-over-year decline (-27%), while pre-orders of the Plus version were up 48%.
As for the major indexes, the tech-heavy Nasdaq Composite fell 0.5% to 17,592, while the broader S&P 500 finished up 0.1% to 5,633 and the blue chip Dow Jones Industrial Average gained 0.6% to 41,622, a new record closing high.
Related content
- Kiplinger's Earnings Calendar and Analysis
- Kiplinger's Economic Calendar for This Week
- Will the Fed Cut Rates in September? Here's What Experts Predict
-
Five Tax-Savvy Ways To Donate This Holiday SeasonCharitable Donations Food pantries, toy drives, and animal sanctuaries are popular ways to support others year-round.
-
A Checklist for Retiring in 2025Navigating the final stretch of your professional career can be daunting. We've compiled a checklist to help you put your best foot forward into retirement.
-
Three Possible Tax Impacts for Retirees Under TrumpHow might a second Trump term affect your tax bill in retirement — or the inheritance tax bill for your heirs? This pro has three predictions.
-
What to Know About Leverage and Bitcoin's Meteoric RiseLeverage in the financial world can lead to astonishing success or a crushing collapse. How are investors using leverage to invest in bitcoin?
-
How Do You Know When It's Time to Change Financial Advisers?Sometimes a breakup is for the best. Here's how to handle 'the talk' and make the switch to a new professional who's a better fit for you.
-
Stock Market Today: Tech Stocks Rally as CPI Supports Lower RatesAn inline inflation report sealed the deal for a December rate cut and sent the tech sector soaring.
-
CPI Report Casts Doubt on Rate Cuts in 2025: What the Experts Are Saying About InflationCPI November Consumer Price Index data sealed the deal for a December rate cut, but the outlook for next year is less certain.
-
The Best Utility Stocks to BuyUtility stocks are defensive plays for investors, offering stability and reliable dividends. Here, we look at how you can find the best ones to buy.
-
The Best Ways to Use Your Year-End Bonus (and the Worst)'National Lampoon's Christmas Vacation' shouldn't be anyone's go-to for financial advice, but it does remind us how not to spend a holiday bonus.
-
LLCs: Power Tools That Can Create Big ProblemsForming an LLC for your business might seem like a straightforward endeavor, but if you don't know exactly what you're doing, trouble could follow.
