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10/01/24 Briefing

U.S. stocks ended mostly lower on Tuesday as investors tried to gauge the timing and size of interest rate cuts by the Federal Reserve this year ahead of the release of new inflation data and earnings results later this week. The Dow and S&P 500 finished in the red, while the Nasdaq ended in positive territory.

The Dow Jones Industrial Average (DJI) declined 0.4% or 157.85 points to close at 37,525.16 points.

The S&P 500 slid 0.2% or 7.04 points, to finish at 4,756.50 points. Consumer staples and tech stocks were the only gainers.

The Consumer Staples Select Sector SPDR (XLP) and the Technology Select Sector SPDR (XLK) gained 0.3% and 0.2%, respectively.

The tech-heavy Nasdaq advanced 0.1% or 13.94 points to finish at 14,857.71 points.

The fear-gauge CBOE Volatility Index (VIX) was down 2.45% to 12.76. A total of 10.56 billion shares were traded on Tuesday, lower than the last 20-session average of 12.3 billion. Decliners outnumbered advancers on the NYSE by a 2.1-to-1 ratio. On the Nasdaq, a 1.7-to-1 ratio favored declining issues.

Stocks ended mostly lower on Tuesday after rallying in the previous session. The Federal Reserve’s next move with rate cuts remained the focus on Tuesday as investors tried to assess the timing of the first rate cut.

Investors are also trying to assess the size of the rate cuts. Investors’ optimism about the first rate cut coming as early as March has somewhat faded. Investors are now pricing in a 59% chance that the Federal Reserve will go with a 25-basis point rate cut in March, which is sharply lower than last week’s readings of 70%.

Also, investors are waiting for the fresh inflation data that is scheduled for release later this week. This will give market participants a clearer picture of the Fed’s expected move.

On Tuesday, the S&P pared some of its initial losses, helped by a brief tech rally. Shares of, Inc. (AMZN) and Alphabet, Inc. (GOOGL) each gained 1.5%. Amazon has a Zacks Rank #2 (Buy). You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here.

Investors are also eagerly waiting for the earnings season, which kicks off on Friday.

In economic data released on Tuesday, U.S. trade deficit narrowed 2% in November to $63.2 billion, the Commerce Department said.

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