By Stephen Culp
NEW YORK (Reuters) -The Nasdaq closed at a record high on Monday and gold jumped to a record high as investors weighed the Federal Reserve’s hawkish statements against evidence that U.S. inflation was cooling.
The tech-heavy Nasdaq led the three major U.S. stock indexes, with a boost from chips Nvidia Corp (NASDAQ:) advanced ahead of its closely watched earnings report, expected on Wednesday.
They ended the session with a modest gain, while the blue-chip Dow Jones dipped below 40,000 after closing above that level for the first time on Friday.
“The Nasdaq is led higher by Nvidia, but otherwise they’re a bit stuck,” said Jay Hatfield, portfolio manager at InfraCap in New York. “The S&P 500 is 11% above its 200-day moving average, which is quite a long time.”
“We are in a bandwidth-constrained market and Nvidia will dominate global stock trading this week.”
The comments from Fed officials reflect the U.S. central bank’s cautious view on its progress in curbing inflation and the timing of interest rate cuts.
Fed Vice Chairman Philip Jefferson said Monday it is too early to say whether the inflation slowdown is “prolonged,” while Vice Chairman Michael Barr said restrictive policies need more time. Atlanta Fed President Raphael Bostic said it will “take a while” for the central bank to be confident that price growth is on a sustainable downward path.
“The market is irrational; it started the year expecting six rate cuts, but then the pendulum swung completely the other way and everyone was talking about hikes,” Hatfield added.
“We’re probably going to grind higher as long as it’s clear that the next action will be a cut and that will happen sometime this year.”
The S&P 500 fell 196.82 points, or 0.49%, to 39,806.77, the S&P 500 gained 4.86 points, or 0.09%, to 5,308.13 and added 108.91 points, or 0.65%, to 16,794.87.
European shares posted modest gains, held in check by interest rate uncertainty.
The pan-European index rose 0.18% and the MSCI index for shares around the world rose 0.11%.
Emerging market stocks rose 0.16%. MSCI’s broadest index of Asia-Pacific shares outside Japan closed 0.19% higher, while rising 0.73%.
U.S. Treasury yields rose slowly after Fed officials expressed uncertainty about the timing of rate cuts.
Benchmark 10-year bonds last fell 7/32 in price to yield 4.4453%, down from 4.42% late on Friday.
The 30-year bond last fell 11/32 in price to yield 4.5816%, down from 4.561% late on Friday.
The dollar posted modest gains against a basket of world currencies as investors waited for further clues on the path of interest rates.
The rate rose 0.15%, while the euro fell 0.11% to $1.0858.
The Japanese yen weakened 0.39% against the greenback at 156.30 per dollar, while the British pound last traded at $1.2702, up 0.02% on the day.
Crude oil prices held steady as investors weighed the Fed’s hawkish commentary against signals that inflation was cooling.
fell 0.32% to settle at $79.80 per barrel while settling at $83.71 per barrel, down 0.32% on the day.
Gold reached record highs, building on last week’s encouraging inflation data, while silver reached its highest level in more than 11 years.
a barometer of economic sentiment, rose to a record high after China announced steps to support its crisis-hit real estate sector.
added 0.4% to $2,424.69 an ounce.
Copper rose 2.97% to $10,985.00 per tonne.
