Stock Market Today: Dow Hits Record High Before Fed Meeting

blue financial ticker board and arrows going up with white moving average — (Image credit: Getty Images)

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%.

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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 However, this data is "badly out of date now," says Bill Adams, chief economist at Comerica.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.

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With over a decade of experience writing about the stock market, Karee Venema is the senior investing editor at Kiplinger.com. She joined the publication in April 2021 after 10 years of working as an investing writer and columnist at a local investment research firm. In her previous role, Karee focused primarily on options trading, as well as technical, fundamental and sentiment analysis.