The Dow finished marginally lower, the S&P 500 ended down almost four-tenths of a percent, while the Nasdaq ended down fractionally.
Investors have turned their attention to the release of key inflation data due out Thursday, known as the personal consumption expenditures price index.
A reading for January that shows price pressures not cooling fast enough could further push back expectations of a Fed rate cut, says Carol Schleif, chief investment officer at BMO Family Office.
“The recent economic data definitely confirms that the Fed is not going to want to cut as soon as March. You saw CPI and PPI come in hotter than expected last week, and we’ll get the PCE this week, which is the Fed’s preferred inflation gauge, and the expectations are that it will show some heat as well. And so that most likely is going to keep the Fed on hold at least until late spring, or early summer. There’s been some conversation recently that the Fed may not be done raising. We think they are. We definitely think the Fed can stay on hold for some length of time though. And our expectation had been for three, maybe four cuts this year. But it will be pretty data-dependent, especially in the next couple of weeks.”
In AI-related stock news, shares of Alphabet (NASDAQ: GOOG) fell 4.5% after the Google parent announced plans to relaunch its AI tool in the next few weeks. It was paused last week after inaccuracies in some historical depictions.
Other movers included Warren Buffett’s Berkshire Hathaway (LONDON: BRK), which fell 2% after the U.S. government warned of a lawsuit against its power company, PacifiCorp.
And shares of Domino’s Pizza jumped nearly 6% after the company beat Wall Street expectations for quarterly same-store sales.
