TLDR
- US stocks fell on Monday with the S&P 500 and Dow down 0.3% while the Nasdaq dropped 0.2%
- Markets are waiting for the Federal Reserve’s policy meeting starting Tuesday, with traders seeing 88% chance of a rate cut
- Warner Bros. Discovery stock surged after Paramount launched a $108 billion hostile takeover bid
- IBM announced an $11 billion deal to acquire data-infrastructure company Confluent
- Key earnings reports from Oracle, Adobe, Broadcom, and Costco are coming this week
US stock markets started the week with losses on Monday as investors prepared for the Federal Reserve’s final policy meeting of 2025. The S&P 500 fell 0.3% while the Dow Jones Industrial Average dropped 0.3%. The Nasdaq Composite slipped 0.2%.
The declines came after stocks posted gains on Friday to close out the previous week. Markets opened higher on Monday but lost momentum as the trading day progressed.
Traders are now focused on the Fed’s two-day policy meeting that begins on Tuesday. Market participants currently see an 88% probability that the Fed will cut interest rates when it announces its decision on Wednesday. This represents a jump from 67% odds seen one month ago, according to CME FedWatch data.
Federal Reserve Split on Rate Decision
The expected rate cut would mark the third reduction of 2025. However, Fed policymakers remain divided on the decision. Some officials are focused on labor market conditions while others are concerned about inflation levels that may still be too high.
Despite this split, support from influential Fed officials has strengthened bets on a rate cut. The outlook for 2026 rate decisions remains less certain.
Friday’s reading on September PCE consumer inflation came in at tame levels. This data helped maintain confidence in the rate cut scenario and supported risk appetite among investors.
Several economic reports are scheduled for release this week. The labor market will be under close watch after mixed readings from last week. The October JOLTS job openings report, which was previously postponed, will be released on Tuesday. This report will provide information on hiring activity, layoffs, and worker quit rates.
Media Industry Shakeup
Warner Bros. Discovery stock saw a large increase on Monday. Paramount launched a $108 billion hostile takeover bid for the media company. This move disrupts earlier plans for Netflix to acquire Warner Bros. Discovery.
The AI stock sector showed mixed performance on Monday. IBM announced plans to buy data-infrastructure firm Confluent for $11 billion. AI-related stocks rallied in early trading but pulled back later in the day.
The iShares Semiconductor ETF was up just 0.3% after earlier gains. Broadcom rose 2.2% while IBM gained 0.8%. Nvidia increased 0.6% after climbing more than 1.4% at the market open.
Earnings Reports This Week
Several major companies will report quarterly earnings this week. Oracle and Adobe are scheduled to release results on Wednesday. Broadcom and Costco will report on Thursday.
Three companies will join the S&P 500 index. Carvana, CRH, and Comfort Systems USA are set to be added to the benchmark index.
Treasury yields moved higher on Monday. The 30-year Treasury yield reached a three-month high during the trading session.
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