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Traders work on the floor of the New York Stock Exchange (NYSE) on March 20, 2024 in New York City.
Spencer Pratt | Getty Images
Stocks fell on Monday at the start of a shortened trading week, as the rally that had driven Wall Street to record levels ended.
of Dow Jones Industrial Average It fell 162.26 points (0.41%) to close at 39,313.64.of S&P500 It fell 0.31% to end at 5,218.19. Nasdaq Composite fell 0.27% to settle at 16,384.47.
shares of intel Shares fell 1.7% after the Financial Times reported that new Chinese guidelines would block the company’s chips on government servers and computers. united airlines The airline fell 3.4% after the Federal Aviation Administration announced it would increase oversight of the airline following a series of safety incidents.
The market is on a five-month upward trend, with major U.S. stock benchmarks hitting new closing highs last week. The S&P 500 rose about 2.3% last week, and the Dow rose just under 2%, its best week since December, nearing the $40,000 level. Meanwhile, the Nasdaq Composite Index rose about 2.9% during the same period.
The progress was fueled by the Federal Reserve’s latest statement that central bankers will maintain their interest rate cut schedule this year and continued investor enthusiasm for tech stocks amid an AI-powered bull market. Overall investor sentiment remains above historical averages, reflecting persistent market optimism, according to the latest weekly sentiment survey from the American Association of Retail Investors.
Still, some investors are concerned about the potential impact of an overextended bull market and rising long-term interest rates. Sam Stovall, chief investment strategist at CFRA Research, also noted that stocks have become expensive, with the S&P currently trading at a 33% premium to its average price-earnings ratio over the past 20 years.
“We’re coming off the post-FOMC high,” he told CNBC. “The market is becoming increasingly vulnerable to market declines and price declines.”
This week, investors will get more insight into the trajectory of inflation from the Federal Reserve’s preferred inflation measure, the February Personal Consumption Expenditure Price Index, released Friday morning. Given the Good Friday public holiday, market reaction will be determined next Monday.
Stovall expects investor reaction to the PCE data to be muted, especially after investors have already reacted to the latest Consumer Price Index and Producer Price Index readings.
“It’s like dropping a ping-pong ball on a table, and the first bounce is the biggest. When PCE is finally announced, it’s like, oh, I’ve been there, I’ve done that. Investors don’t know what it’s all about. “I don’t think I’m that worried,” he added. “There is nothing on the outlook that would upset investors’ current expectations.”
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