At the beginning of the week, following the Thanksgiving celebrations and amidst the holiday sales season, the U.S. stock markets showed a slight decline. Retailers attracted customers with Cyber Monday deals, but this did not prevent the indexes from dipping into the negative.
The three major U.S. stock indexes ended the trading day with modest losses.
Tom Heinlein from U.S. Bank Wealth Management explained the current market situation: "The markets are taking a break after recent growth. We have reached the upper limit of the trading range that has been holding for quite some time."
Adobe Analytics predicts that online shopping on Cyber Monday will reach a record $12 billion, indicating the health of the American economy, where consumer spending accounts for about 70% of GDP.
Greg Bassuk from AXS Investments noted: "After a month of active and positive market dynamics, investors are pausing and focusing on data analysis."
This week, additional data on inflation, consumer confidence, and spending will be in focus to assess how the pace of consumer activity matches the dynamics on Wall Street.
The consumers' ability to maintain spending levels and the tense labor market situation amid slowing economic activity lead to reflections among experts about the prospects of the Federal Reserve's policy.
There is an opinion that, despite reaching the end of the monetary policy tightening cycle, the Fed may continue to maintain high interest rates longer than previously anticipated.
According to financial analysts, the likelihood that the Federal Reserve will maintain the current level of rates at its next meeting is estimated at 96.8%. It is expected that discussions about lowering rates will become relevant by mid-2024, according to the CME FedWatch analytical tool.
In the economic context, a greater-than-expected drop in new home sales reinforces a cautious mood in the market. Market participants eagerly anticipate the second report from the U.S. Department of Commerce on the GDP for the third quarter, which will be published on Wednesday, followed by a detailed report on personal consumer expenditures (PCE) on Friday.
Statements from Federal Reserve officials, expected throughout the week, will be closely scrutinized by analysts for hints about the duration of the current restrictive monetary policy.
Tom Heinlein emphasized expectations regarding the actions of the Federal Reserve: "We expect the Fed to be cautious in concluding the rate hike cycle." He added that the market has likely reached or is nearing peak rates, and now the question is how long they will remain at this level and whether they will be lowered in 2024.
The Dow Jones Industrial Average fell 56.68 points (0.16%) to 35,333.47, the S&P 500 lost 8.91 points (0.20%), dropping to 4,550.43, while the Nasdaq Composite decreased by 9.83 points (0.07%), reaching 14,241.02.
Among the gainers on the Dow Jones were shares of 3M Company, which rose by 1.13 points (1.18%), closing at 97.08. Shares of The Travelers Companies Inc increased by 1.00 point (0.56%), reaching 178.54, and the price of Walmart Inc shares went up by 0.69 point (0.44%), ending the trading session at 156.75.
In the NASDAQ Composite, the leaders were shares of Redhill Biopharma Ltd, which soared 216.96% to 1.00, Biodexa Pharmaceuticals PLC DRC, rising 91.03% to 5.11, and Asset Entities Inc, which grew 88.89%, closing the session at 0.66.
Among the main sectors of the S&P 500, the biggest declines were recorded in the healthcare and industrial sectors, while the real estate and consumer goods sectors showed the most growth.
During the Cyber Monday sales, shares of Affirm Holdings jumped 12.0% thanks to the popularity of their "buy now, pay later" payment system, contributing to increased online sales during the holiday period. Shares of online platforms Etsy and Shopify also rose by 3.0% and 4.9%, respectively.
Shares of Crown Castle International rose by 3.4% after demands from investment firm Elliott Investment Management for changes in the leadership and board of directors of the company, which owns a network of wireless towers.
GE HealthCare shares significantly fell by 3.5% after the analytical firm UBS downgraded their rating from "neutral" to "sell," reflecting concerns about the medical equipment manufacturer.
On the New York Stock Exchange, the number of declining stocks outnumbered the advancing ones with a ratio of 1.25 to 1. On the Nasdaq, this ratio was 1.63 to 1 in favor of declining stocks.
The S&P 500 index recorded 38 new 52-week highs and did not register any new lows, while the Nasdaq Composite recorded 84 new highs and 79 new lows.
The total volume of trades on American stock exchanges amounted to 9.25 billion shares, which is less than the average value for the last 20 trading days, equaling 10.42 billion.
The CBOE Volatility Index, calculated based on options trading on the S&P 500, rose by 1.85%, reaching 12.69.
December gold futures increased by 0.59%, or $11.85, to $2,000 per troy ounce.
In the energy resources segment, January delivery futures for U.S. crude oil WTI fell by 0.73%, or $0.55, to $74.99 per barrel, while February delivery futures for Brent crude oil decreased by 0.61%, or $0.49, to $79.99 per barrel.
In the foreign exchange market, the EUR/USD pair showed a minor change of 0.14%, reaching 1.10, while the USD/JPY rate fell by 0.53%, to 148.65.
The futures for the U.S. dollar index dropped by 0.18%, to 103.12.