Stocks dipped lower in morning trade as the market took a pause following last week's record strength as investors look for directions with valuations remaining high. The Dow Jones Industrial Average fell over 150 points, while the S&P 500 Index and Nasdaq Composite slipped about 0.3% each.
Here's how the market settled on Monday:
S&P 500 Index (NYSE: SPY): -0.31% or -15.97 points to 5,218.21
Dow Jones Industrial Average (NYSE: DIA): -0.41% or -162.13 points to 39,313.77
Nasdaq Composite Index (NASDAQ: QQQ): -0.27% or -44.35 points to 16,384.47
Moving Markets: Despite the day's losses, Wall Street is on track for its fifth straight month of gains, with the Dow hovering near the 40,000 key threshold -- and posting its best week since December -- as all benchmarks ended with gains last week. Much of the market's recent positive momentum is being fueled by the Federal Reserve maintaining its interest rate cutting timeline despite continued inflationary pressures, as well as boosted growth sentiment stemming from the emerging AI industry.
Wall Street's expected growth was supported by HSBC strategist Nicole Inui, who raised the firm's year-end target for the S&P 500 to 5,400 in a report on Monday, implying a 2% upside from Friday's close due to "better earnings expectations" arising from "resilient GDP growth, recent earnings beats, and positive sentiment from corporates in the last earnings season."
Inui added that the firm's target is dependent on the central bank beginning its rate cutting campaign in June and issuing 75 basis points total cuts in 2024. Moreover, the second half of the year is expected to bring more volatility, according to Inui, citing reasons like the U.S. presidential election, increased earnings expectations and shifting sentiment about how much the Fed will cut rates.
Making Headlines: Boeing (NYSE: BA) CEO Dave Calhoun will step down at the end of 2024 as part of a broad management shift for the aerospace manufacturer. Steve Mollenkopf, former CEO or Qualcomm (NASDAQ: QCOM), will also succeed Larry Kellner as chairman of the board and lead the board in selecting a new CEO, Boeing said. Elsewhere, Stan Deal, president and CEO of Boeing Commercial Airplanes, is leaving the company effective immediately, with Stephanie Pope, who recently became the company's chief operating officer, taking over the position.
"The eyes of the world are on us, and I know we will come through this moment a better company, building on all the learnings we accumulated as we worked together to rebuild Boeing over the last number of years," Calhoun worte in a statement to employees on Monday, quoted by CNBC.
The European Union on Monday opened an investigation into Apple (NASDAQ: AAPL), Alphabet (NASDAQ: GOOG) (NASDAQ: GOOG) and Meta Platforms (NASDAQ: META) in its first action under the new Digital Markets Act (DMA) legislation.
The first few probes of several issued by the European Commission focus on Apple and Alphabet under the DMA's anti-steering rules, which prohibits firms from blocking businesses from informing users about cheaper options for products and subscriptions outside of an app store. For Apple in particular, the Commission is "concerned that Apple's measures, including the design of the web browser choice screen, may be preventing users from truly executing their choice of service within the Apple ecosystem."
When it comes to Alphabet's probe, the Commission is investigating whether the company's Google search results display "may lead to self-preferencing" of Google products like Google Shopping over similar products from competitors. For Meta, the regulator is looking into the firm's so-called 'pay and consent model,' where its ad-free subscription model for Facebook and Instagram in Europe -- which allows users to opt-out of certain terms and conditions that are mandatory for the free service -- "may not provide a real alternative in case users do not consent."
On the Economic Front: Sales of new single-family homes in the United States fell 0.3% month-to-month in February to a seasonally adjusted annual rate of 662,000, the Census Bureau reported Monday. Still, sales rose 5.9% from February 2023. This data comes after a 9.5% jump for existing U.S. home sales in February.
For Tuesday: Investors will pour over consumer confidence results for March.