The S&P 500 traded lower Monday, pausing a January rally as investors braced for the busiest week of earnings season and a possible interest rate hike from the Federal Reserve.
The broader market index fell about 0.7%, while the Nasdaq Composite dropped by roughly 1.2%. The Dow Jones Industrial Average declined 89 points, or about 0.3%.
Communication services and information technology were among the biggest laggards in the S&P 500, each down about 1.3%. Mega-cap tech stocks such as Meta Platforms and Alphabet were more than 2% lower, each. Semiconductor stock Advanced Micro Devices fell more than 2%.
Elsewhere, Ford shares fell more than 1% after the automaker said it’s cutting prices and ramping up production on its electric Mustang Mach-E crossover, following a similar announcement from Tesla.
Still, the S&P 500 is headed for its best January since 2019 when it gained nearly 8%. The broader market index is up 5.2% for 2023 following a 19% loss last year.
However, there are several tests this week for the 2023 rally. About 20% of the S&P 500 will report earnings this week, including McDonald’s and General Motors on Tuesday followed by tech giants Apple, Meta Platforms, Amazon and Alphabet later in the week.
The Federal Open Market Committee meets on Tuesday and Wednesday, when the Fed is expected to hike rates by one-quarter of a percentage point. Investors will be looking for clues about how much higher the central bank will take rates in the fight against inflation….
