Markets Brace for Fed Rate Cut Amidst Mixed Stock Indexes

Major stock indexes showed mixed results as anticipation builds for a Federal Reserve meeting this week, where a significant rate cut is expected to maintain economic stability. The Dow and S&P 500 saw gains, while the Nasdaq Composite experienced losses. Investors also reacted to a second assassination attempt on Donald Trump.

Major stock indexes were mixed at the New York open on Monday, with the dollar remaining soft against global peers as attention shifted to a pivotal Federal Reserve meeting later this week, expected to initiate a highly anticipated easing cycle. Expectations are growing that the Federal Reserve could cut rates by up to half a point to keep the economy stable while managing slowing job growth and moderating inflation.

The Dow Jones Industrial Average and S&P 500 saw gains in early trading, even as tech stocks weighed down the Nasdaq Composite, with NVIDIA, Microsoft, and Tesla dipping. XTB research director Kathleen Brooks indicated that markets would look beyond the size of any rate cut on Wednesday to grasp the Fed's underlying rationale.

Brooks said, "If the Fed starts by cutting 50 bps but reiterates that it aims to preserve the economy's soft landing, this would be positive for the stock market. However, if it seems like the Fed is panic-cutting rates due to some looming crisis, expect stocks to sell off." Meanwhile, investor attention was also captured by news of a second assassination attempt on Republican presidential candidate Donald Trump, causing volatility in shares of his Trump Media & Technology company. The Dow rose 0.6% to 41,635.89, the S&P 500 gained 0.07% to 5,629.95, while the Nasdaq Composite lost 0.49% to 17,595.00.

(With inputs from agencies.)