Stocks ended higher on Monday in a choppy trading session ahead of the Federal Reserve’s two-day policy meeting scheduled to begin on Tuesday.
The Dow Jones Industrial Average rose 197.26 points, or 0.64%, to 31,019.68. The S&P 500 rose 0.69% to 3,899.89 and the Nasdaq Composite added 0.76% to 11,535.02.
Stocks swung between gains and losses throughout the session, with the 30-stock index down as much as 263 points earlier in the day. At session lows, the S&P 500 and Nasdaq each fell more than 0.9%.
Yields pushed higher ahead of the Federal Reserve’s likely decision to raise benchmark interest rates by another 75 basis points later this week to keep inflation in check. The 10-year treasury bond yield exceeded 3.51%, hitting an 11-year high.
After some brief summer hopes that the Federal Reserve could complete its aggressive tightening policy, investors are selling stocks again on fears that the central bank will go too far and tip the economy into recession.
Investors focused on the Federal Reserve’s policy meeting scheduled to begin on Tuesday, where the central bank is expected to raise interest rates by 75 basis points. Investors are also eyeing guidance on corporate earnings ahead of the next earnings season in October.
“We’re on the sidelines and the market is waiting for some kind of bullish or bearish catalyst to get us out of this trading range,” said Adam Sarhan, chief executive of 50 Park Investments. “The market is trying to find its way, which is fundamental face news.”
Nine of the 11 S&P 500 sectors closed higher, led by gains in materials, consumer discretionary and industrials. Financial stocks also rose as some investors bet that higher interest rates could benefit their profits. Healthcare is lagging after comments from President Joe Biden that the pandemic is over.
Stocks fell last week as investors reacted to a higher-than-expected inflation report and a gloomy warning from FedEx that the global economy was “significantly deteriorating.” The major indexes fell for the fourth straight week in five.
Following the key Federal Reserve meeting, some economic data will be released this week, including August housing starts on Tuesday and initial jobless claims on Thursday.
–CNBC’s Patti Domm contributed reporting.
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