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%.
From just $107.88 $24.99 for Kiplinger Personal Finance
Be a smarter, better informed investor.
Sign up for Kiplinger’s Free 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 However, this data is "badly out of date now," says Bill Adams, chief economist at Comerica.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
-
The power and flexibility of 529 savings plansSPONSORED Today’s 529 plans can be used in more ways—and at more types of schools—making them one of the smartest ways to save for education.
-
Stocks Grind Up to New All-Time Highs: Stock Market TodayUnitedHealth stock led the Dow Jones Industrial Average amid increasing signs the labor market has not been well for months.
-
Stocks Grind Up to New All-Time Highs: Stock Market Today
UnitedHealth stock led the Dow Jones Industrial Average amid increasing signs the labor market has not been well for months.
-
The 'Nothing Ever Happens' Market: How Stocks React (Or Don't) to Geopolitical EventsGeopolitical events — terrorist acts, wars, or military intervention — can give stocks a jolt. But that doesn't mean your portfolio will take a hit in the long run.
-
I'm a Financial Adviser: You've Built Your Wealth, Now Make Sure Your Family Keeps ItThe Great Wealth Transfer is well underway, yet too many families aren't ready. Here's how to bridge the generation gap that could threaten your legacy.
-
Want to Advance on the Job? Showing Some Courtesy and Appreciation Could HelpTwo business professors share their insights about the impact of digital communication on the social skills of some in Gen Z and the importance of good manners on the job.
-
Markets Prepare for August Inflation Data: Stock Market TodayApple CEO Tim Cook is still important, but price action this week is as much about incoming inflation data ahead of next week's Fed meeting.
-
From Job Loss to Free Agent: A Financial Professional's Transition Playbook (and Pep Talk)The American workforce is in transition, and if you're among those affected, take heart. You have the skills, experience and smarts that companies need.
-
A Financial Planner's Top Five Items to Prioritize When Your Spouse Is IllDuring tough times, it's easy to overlook important financial details, but you'll be so much better off if you take care of these things right now.
-
An Expert Guide to Outsmarting Inflation: Don't Let It Restrict Your RetirementInflation is often underestimated when estimating retirement income, education funding or investment returns. These strategies can help preserve your purchasing power and reduce your financial anxiety.
