On Monday, U.S. stocks experienced a notable decline following the significant rally of the previous week. The Dow Jones Industrial Average fell approximately 0.4%, while the S&P 500 dipped 0.2%, and the Nasdaq Composite decreased by 0.1%, as reported by Yahoo Finance. This downturn came after stocks had recently achieved new record highs due to investor optimism surrounding the Federal Reserve’s initial rate cut of 2025.
Anticipation is building among investors as a busy week of speeches from Federal Reserve officials is underway. Stephen Miran, the newly appointed Fed governor backed by President Trump, is scheduled to speak in New York on Monday. Following him, Fed Chair Jerome Powell will address the public on Tuesday, with additional Fed members slated to share their insights later in the week. Miran has promised to outline his policy perspectives during this crucial first appearance.
Moreover, market participants are closely monitoring the upcoming Personal Consumption Expenditures (PCE) inflation data, which is the Fed’s preferred measure of inflation. Set to be released on Friday, a weak PCE report could heighten the likelihood of another quarter-point rate cut in October. Wall Street anticipates that the September PCE will indicate that inflation remains present; however, it may be moderate enough for the Fed to continue its approach of reducing interest rates.
In related market movements, gold prices surged to an unprecedented high of $3,750. This spike is largely attributed to traders’ expectations that the Fed will enact two further interest rate cuts by the end of 2025. Conversely, cryptocurrencies, particularly Bitcoin (BTC-USD), experienced a sharp decline, with traders incurring losses exceeding $1.5 billion as positions were liquidated.
Additionally, the markets are bracing for potential ramifications stemming from President Trump’s new immigration regulations. Recently announced, the administration plans to impose a $100,000 fee for H-1B work visas. Major corporations such as Microsoft and Goldman Sachs quickly alerted their employees regarding the new rule, leading to mixed trading results among mega-cap tech stocks.
In company-specific news, Oracle’s stock fell over 1% ahead of opening after it was announced that longtime CEO Safra Catz would be stepping down. The company has appointed two co-CEOs: Clay Magouyrk, previously president of Oracle Cloud Infrastructure, and Mike Sicilia, who was president of Oracle Industries. Both executives had recently been promoted as part of a succession plan.
Earlier in the day, Oracle’s shares had seen an uptick due to developments regarding TikTok. Reports indicated that Oracle would manage and operate TikTok’s algorithm within the U.S., also ensuring the storage of American user data in its cloud services. This move is seen as a strategic effort to help TikTok avert a U.S. ban, and analysts view the deal as beneficial for Oracle, given that TikTok data is expected to contribute about 5% of Oracle’s revenue from its Cloud Infrastructure division in fiscal 2025.
In pharmaceutical news, Pfizer announced it would acquire Metsera for $7.3 billion. Following this announcement, Metsera’s stock surged over 60% in premarket trading, while Pfizer’s shares rose approximately 1%. This acquisition comes after Pfizer’s own weight-loss medication, danuglipron, failed to meet expectations in clinical trials. The deal values Metsera at $4.9 billion, with the potential for additional payments of up to $22.50 per share if the company meets specific clinical and regulatory benchmarks. Metsera has a promising pipeline of GLP-1 obesity drug candidates, making this acquisition significant for Pfizer’s future.
Investors are also anticipating earnings reports from Micron Technology, which will provide insights into the demand for AI chips, as well as Costco’s results, which may shed light on consumer spending patterns. Additionally, Wall Street is awaiting the release of The University of Michigan’s consumer sentiment index later this week. On another note, mortgage rates have reached near their lowest levels in a year, according to Freddie Mac.
In summary, the stock market faced pressures amid a backdrop of influential Federal Reserve speeches, inflation data anticipation, and significant corporate developments, prompting investors to take a cautious stance.
