Sentiment continues to be guarded as traders look ahead to a two-day monetary policy meeting that kickstarts on Tuesday. Oil is northward bound, and bond yields are flatlining after their Monday’s gains. The focus will likely be on the United Auto Workers union strike as it enters its fifth day. A housing market report ahead of the market opening could also create some ripples in the market. The underlying mood will likely be one of caution as traders look ahead to the Fed’s thinking on the future rate trajectory.
Cues From Monday’s Trading:
Stocks showed listlessness on Monday, characteristic of pre-Fed meeting sessions, although they ended marginally higher. The major indices started lower and saw more weakness in early trading, but buying interest picked up following the release of housing market data that showed receding builder confidence.
After peaking by the mid-session, the indices gave most of the gains throughout the session amid rising bond yields and crude oil prices and yet closed just above the unchanged. Small-cap stocks, however, came under pressure and stayed below the flat line for the bulk of the session.
Consumer discretionary and real estate stocks came under intense selling, while gains by energy stocks and, to some extent, by technology and communication services stocks helped mitigate the weakness.
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