Stock Market Today: S&P 500, Nasdaq notch record highs ahead of Fed meeting

Investing.com-- The S&P 500 and Nasdaq closed at fresh record highs Monday as technology started the week on front foot just ahead of the Federal Reserve interest rate decision and inflation data due this week.

At 16:00 ET (20:00 GMT), The S&P 500 rose 0.3% to a record high of 5,362.70. The NASDAQ Composite added 0.4% and the Dow Jones Industrial Average gained 69 points, or 0.2%.

Apple unveils Apple Intelligence; Nvidia (NASDAQ:NVDA) adds to gains, AMD stumbles

Apple (NASDAQ:AAPL) stock fell nearly 2% even as the tech giant unveiled its foray into artificial intelligence with the launch of AI platform Apple Intelligence at its annual developer conference.

The new personalized AI platform would be able to rewrite text, generate images, and take actions across multiple apps.

"We believe Apple's AI strategy will leverage its golden installed base around personalization and LLMs [large language models] on the phone that should change the growth trajectory of Cupertino as spur an AI driven iPhone upgrade cycle starting with iPhone 16," Wedbush said in a Monday note.

Nvidia stock closed above the flatline, but Advanced Micro Devices Inc (NASDAQ:AMD) fell more 4% after Morgan Stanley downgraded the chipmaker to equal weight from overweight, citing concenrs about valuation.

Fed meeting, CPI data eyed

Investors are showing a degree of caution ahead of the conclusion of the latest Fed meeting on Wednesday, where the central bank is likely to keep interest rates unchanged.

Market watchers are keen to see how many rate cuts officials will signal for the rest of 2024, with the updated dot plot likely to point to two 25-basis point cuts this year, down from three in March.

Citi economists now expect the Federal Reserve to begin cutting rates in September rather than July, following the much hotter-than-expected May jobs data released last week.

“We now expect 75bp of total cuts this year in September, November and December,” the bank’s economists said in a Friday note.

“But the jobs report does not change our view that hiring demand, and the broader economy, is slowing and that this will ultimately provoke the Fed to react with a series of cuts beginning in the next few months,” they added.

Consumer price index inflation data is also due on Wednesday, before the Fed's announcement, and is expected to show inflation remaining comfortably above the central bank’s target range.

Inflation has been the Fed’s biggest consideration in altering interest rates, and the data could fire markets up ahead of Fed Chair Jerome Powell's post-meeting press conference.

Banks drag financials lower; Southwest reportedly attracts activist interest

Huntington Bancshares Incorporated (NASDAQ:HBAN) fell more 6%, pressuring several regional banks and the broader financial sector, after the regional bank said cut its net interest income guidance for the year, forecasting a decline of between 1% to 4%, compared with prior forecast for a decrease of 2% to a gain of 2%.

Regions Financial Corporation (NYSE:RF), PNC Financial Services Group Inc (NYSE:PNC) and KeyCorp (NYSE:KEY) were about 2% lower.

Southwest Airlines (NYSE:LUV) stock soared more than 7% after the Wall Street Journal reported that activist investor Elliott Investment Management has built a nearly $2 billion stake in the carrier and plans to push for changes.

(Peter Nurse, Amber Warrick contributed to this article.)

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