US stocks climb as rate cut hopes defy cautious Fed

The Dow Jones Index has seen slight gains on Monday, climbing four-tenths of a percent as investors recover balance and resume the long wait for rate cuts from the Federal Reserve. The ‘bad news is good news’ sentiment has fueled investor sentiment seeking an accelerated pace of rate cuts from the Fed, but has begun to destabilize as US economic data begins to cool faster than expected. The Fed is still firmly entrenched in a holding pattern as policymakers seek firmer signs of cooling inflation within the US domestic economy as shelter and services inflation thumbs the nose at market expectations.

Markets continue to hope for a quarter-point cut from the Fed at the September 18 policy meeting, with rate traders pricing in over 60% odds of at least a 25-basis point rate trim from the Fed in September. US Retail Sales are expected to recover to 0.2% MoM in May after the previous month’s flat 0.0%. Over two-thirds of the DJIA’s constituent securities are in the green on Monday, as investors lean into a risk-on mood to kick off the new trading week.

On the upside, Apple Inc. has climbed around three percent on Monday, shouldering its way into $218.54 per share as investors flaunt a recent demotion in Apple’s volume weighting in the Technology Select Sector SPRDR ETF Fund (XLK). The ETF reduced Apple’s volume share to just 4.5% as investors continue to scoop up Nvidia Corp. (NVDA), whose share in the same ETF rose to 21% to match Microsoft’s weighting within the fund.

The Dow Jones Industrial Average is snapping a near-term losing streak, on pace to close in the green for the first time in five trading days after closing lower for four straight sessions.