MSCI’s gauge of stocks across the globe declined 1.82 points, or 0.21%, to 851.02 for the day
MSCI’s global equities index dropped on Monday and the dollar gained as the Fed Chair Jerome Powell dampened hopes for another big rate cut, while oil futures closed flat after a choppy session on concerns about an escalating conflict in the Middle East.
Global benchmark Brent crude, however, posted its biggest monthly loss since November 2022 and its biggest quarterly drop in a year, plunging 17% in the third quarter, as fading global demand concerns overshadowed concerns of the conflict curbing supply.
Stock trading was choppy after Powell indicated that the central bank was not in a hurry to cut rates. While some investors had been betting on more substantial easing, Powell indicated that the central bank would make two 25 bp cuts this year if the economy evolves as expected.
That sounded less dovish than the market had priced in. There were some expectations for a 50 bp cut by the end of the year. That comment probably took it off the table, according to Robert Phipps, a director at Per Stirling Capital Management.
Wall Street had rallied last week on a benign figure on core U.S. inflation on Friday that had boosted bets for another half-point rate from the Federal Reserve.
But on Monday traders saw a 36.7% chance of a 50 bp cut in November, down from 53.3% on Friday, as per the CME Group’s FedWatch tool.
While stocks declined during Powell’s speech, they regained lost ground with the S&P 500 and the Dow registering record closing highs on the last day of the quarter when many traders make last minute adjustments to their portfolios.
The price increases at the end of the day were probably due in part to quarter-end-window dressing, according to Rick Meckler, partner, Cherry Lane Investments.
The Dow Jones Industrial Average gained 17.15 points, or 0.04%, to 42,330.15, the S&P 500 added 24.31 points, or 0.42%, to 5,762.48 and the Nasdaq Composite advanced 69.58 points, or 0.38%, to 18,189.17.
MSCI’s gauge of stocks across the globe declined 1.82 points, or 0.21%, to 851.02 for the day. For the month the global index was showing an increase of nearly 2% and for the quarter it was registering a gain of nearly 6%.
