S&P inches up, Nasdaq declines as tech weighs ahead of Fed decision

The S&P 500 eked out a slight gain in a subdued session while the Nasdaq fell on Monday, weighed down by a drop in technology stocks as investors assessed the likelihood of an upsized rate cut from the U.S. Federal Reserve this week.

The S&P technology index S5INFT, the best performer of the 11 major S&P sectors this year, lost 0.95% as the session's biggest decliner.

Apple AAPL dropped 2.78% as the biggest drag to both the benchmark S&P index and Nasdaq Composite, after an analyst at TF International Securities said demand for its latest iPhone 16 models was lower than expected.

The demand concerns also weighed on chipmakers, with Nvidia NVDA, the best performer on the S&P 500 this year, down 1.95%, Broadcom AVGO off 2.19% and Micron Tech MU 4.43% lower to push the Philadelphia SE Semiconductor index SOX down by 1.41%.

"If people want to raise a lot of money quickly, how do they do it? They go sell the names that they can sell really quickly without necessarily destroying it. So you can sell Apple, you can sell Nvidia, you can sell Amazon, you can sell Microsoft very quickly and raise a lot of cash," said Ken Polcari, chief market strategist at SlateStone Wealth in Jupiter, Florida.

"They want to do it in front of the Fed in case they're getting nervous or they want to raise cash to just have cash available to put to work."

The Dow Jones Industrial Average DJI rose 228.30 points, or 0.55%, to 41,622.08, the S&P 500 SPX gained 7.07 points, or 0.13%, to 5,633.09 and the Nasdaq Composite IXIC lost 91.85 points, or 0.52%, to 17,592.13.

Of the 11 S&P 500 sectors, only tech and consumer discretionary stocks S5COND were lower on the day while financials SPF, up 1.22%, and energy SPN, up 1.2%, were the best performers.

Markets have rallied since the start of this year on expectations the Fed would begin loosening its monetary policy, while data has suggested the economy could avoid entering a recession.