STORY: U.S. stocks finished lower Monday. investors weighed whether the U.S. Federal Reserve might pause its interest rate hikes at its upcoming policy meeting, while Apple briefly hit a record high before losing ground.
The Dow dropped six-tenths of one percent, the S&P 500 lost two tenths and the Nadsaq fell about a tenth.
The odds of the Fed standing pat at its meeting next week are now about 80 percent according to the CME FedWatch Tool. This follows a report out Monday that showed the U.S. services sector barely grew in May as new orders slowed, Traders however still see a 60-percent chance of another rate hike at the Fed’s July meeting. Hennion and Walsh President and Chief Investment Officer Kevin Mahn says he thinks the rate hikes in 2023 have ended.
“According to the Federal Reserve's own projections, they believe that the GDP or economy will only grow by 4/10 of 1% this year. Coming off first quarter that grew 1.3%. Second quarter that's projected to grow at 1.9% if I do the math right, that means a couple of consecutive quarters of negative GDP growth may be ahead of us. That's going to prevent the Fed from being more aggressive or raising more interest rates even more.”
Shares of Apple meanwhile rose ahead of its latest product announcement. The world's most valuable company unveiled an augmented-reality headset called the Vision Pro, its riskiest and biggest bet since the introduction of the iPhone. The stock closed down nearly 1-percent.
And Tesla’s shares climbed close to two percent after the electric vehicle maker's sales of China-made cars in China jumped in May.