Wall Street closed with minimal changes on Monday as investors awaited the U.S. Federal Reserve’s decision on interest rates. The three major U.S. stock indexes ended the session with slight gains, reflecting the lack of conviction among investors leading up to the Fed’s two-day monetary policy meeting. Market participants are cautious about the potential impact of Fed Chairman Jerome Powell’s comments and the possibility of a government shutdown. The central bank has emphasized its flexibility in response to economic data, which indicates that core inflation is gradually returning to the Fed’s target of 2% and suggests a strong U.S. economy. Treasury Secretary Janet Yellen warned against a government shutdown, stating that it could disrupt economic momentum. The main focus of the week is the Fed’s policy meeting, which is expected to result in a pause in rate hikes. The Federal Open Markets Committee will release its Summary of Economic Projections, including the “dot plot” that reveals members’ expectations for future interest rates. Financial markets anticipate that the Fed will maintain the current interest rate range, but uncertainty remains about the trajectory beyond Wednesday’s meeting. Investors hope that the economic projections will indicate a softening of the economy next year, as they assess the timing of a potential Fed pivot. However, concerns persist about the possibility of a recession. The Dow Jones Industrial Average, S&P 500, and Nasdaq Composite all experienced marginal gains. Energy shares performed well, driven by rising crude prices, while consumer discretionary stocks, particularly Tesla Inc, faced a decline. VF Corp saw a significant drop following a downgrade by Piper Sandler, and Arm Holdings slid after receiving an “underperform” rating from Bernstein. PayPal Holdings also experienced a decline after a rating cut by MoffettNathanson. Declining issues outnumbered advancing ones on the NYSE and Nasdaq. The S&P 500 and Nasdaq Composite recorded new highs and lows. The volume on U.S. exchanges was slightly lower than the average for the past 20 trading days.
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