Markets pull back as investors await CPI data
U.S. stocks closed lower Monday as traders positioned ahead of Tuesday’s consumer inflation report, which could influence the Federal Reserve’s interest rate path for the rest of the year. The Dow Jones Industrial Average fell 200.52 points, or 0.45%, to 43,975.09. The S&P 500 slipped 16 points, or 0.25%, to 6,373.45, while the Nasdaq Composite lost 64.62 points, or 0.3%, to 21,385.40.
Market sentiment was cautious, with investors weighing recent signs of labor market weakness and leadership changes at the Fed. According to LSEG data, markets are pricing in roughly 60 basis points of rate cuts by December. Eric Teal, CIO at Comerica Wealth Management, said tariff-driven inflation pressures could keep price growth “sticky,” adding that weaker inflation and slower growth are needed to justify lower borrowing costs.
Chip sector faces new U.S.-China tensions
Semiconductor stocks were volatile after reports that Nvidia and Advanced Micro Devices had agreed to remit 15% of revenue from advanced chip sales to China back to the U.S. government. The move could squeeze margins and set a precedent for taxing other strategic exports. Nvidia closed 0.35% lower, AMD fell 0.28%.
Separately, President Donald Trump signed an executive order extending a pause on increased tariffs for Chinese imports by 90 days. The tariff reprieve comes as part of an agreement between Washington and Beijing set to expire Tuesday. Trump praised China’s cooperation during a White House press conference.
Notable movers in Monday’s session
Micron Technology rose 4% after raising its fourth-quarter revenue and profit guidance. Intel gained 3.5% following reports that CEO Lip-Bu Tan visited the White House, days after Trump had called for his ouster. TKO Group surged 10% after Paramount secured exclusive rights to distribute UFC events for seven years in a $7.7 billion deal.
Declining issues outnumbered advancers by a 1.18-to-1 ratio on the NYSE and a 1.24-to-1 ratio on the Nasdaq. The S&P 500 recorded 15 new 52-week highs and 17 new lows, while the Nasdaq saw 73 highs and 121 lows. Trading volume was lighter than average, with 15.5 billion shares changing hands versus the 20-session average of 18.3 billion.
