US stocks pulled back on Monday as investors turned cautious ahead of the Fed rate-cut decision on Wednesday.
The S&P 500 fell 0.3% and the Nasdaq slipped 0.1% ahead of the Federal Reserve’s final policy meeting of the year. The Dow Jones Industrial Average gave up 246 points (about 0.5%) by midday.
The modest midday pullback reflects a market that has already priced in an 87% chance of a quarter-point rate cut but remains deeply uncertain about what comes next.
Wall Street hit the pause button
The “hawkish cut” scenario is the primary worry keeping buyers on the sidelines.
Traders fear that Chair Jerome Powell might deliver the expected 25 basis point reduction but pair it with cautious guidance for 2026, citing sticky service inflation or fiscal uncertainty.
This anxiety was visible in the bond market, where the 10-year Treasury yield inched up to roughly 4.16%, acting as a gentle headwind for equity valuations.
Under the surface, the selling was orderly but broad, with decliners outpacing advancers by a nearly 2-to-1 margin on the NYSE.
The Dow’s underperformance was driven by weakness in Industrials and Consumer Discretionary stocks.
Rivian slid 3% after announcing a 35,000-vehicle recall, while Marvell Technology tumbled 6% after being snubbed for S&P 500 inclusion, dragging on semiconductor sentiment.
Technology stocks offered a bright spot, keeping the Nasdaq’s losses minimal.
Confluent skyrocketed nearly 30% after IBM announced an $11 billion acquisition deal, a move that reignited hopes for software M&A.
Warner Bros. Discovery also bucked the trend, surging by more than 7% amid a hostile takeover battle with Paramount, proving that idiosyncratic deal news can still drive alpha even on a red day.
Macro voices & market positioning
Monday’s consolidation is seen as a rational move, as the S&P 500 index is already trading near all-time highs.
As per the analysts, the investors would like to play it safe until the Fed announces its decision and gives clearer guidance.
“Nobody wants to be caught long on a ‘sell the news’ event if Powell decides to sound tough on inflation for 2026,” said one analyst.
Safe-haven flows were muted, suggesting this isn’t a flight to safety but rather a tactical de-risking.
Gold remained just below record highs, while the dollar index was flat, further confirming that the market is in “wait-and-see” mode rather than “run-for-the-hills” mode.
The investors will closely watch the Job Openings (delayed report), which is all set to arrive on Tuesday.
The report is expected to serve as a final read on labor demand, but the real catalyst remains Wednesday’s “dot plot.”
If Fed officials signal fewer cuts for 2026 than the market expects, this modest midday dip could accelerate into a sharper year-end correction.
The post US midday market brief: market cools ahead of Fed decision, Nasdaq slips 0.1%, S&P 500 pulls back appeared first on Invezz