Traders work on the floor of the New York Stock Exchange during afternoon trading on September 13, 2022 in New York City.
Michael M. Santiago | Getty Images News | Getty Images
Stocks fell on Monday, swinging between gains and losses in a volatile trading session ahead of the Federal Reserve’s two-day policy meeting later this week.
The Dow Jones Industrial Average was last down 53 points, or 0.17%, as it was between gains and losses. The 30-share index fell as much as 263 points to session lows and rose nearly 130 points to highs. The S&P 500 and Nasdaq Composite were last down 0.28% and 0.37%, respectively.
Yields rose ahead of the Fed’s likely decision to raise its benchmark rate by another three-quarters of a point to curb inflation later this week, with the 10-year Treasury yield above 3.51% and reaching its highest level in 11 years.
After a brief glimmer of hope over the summer that the Fed might soon end its aggressive tightening campaign, investors have started to pull back stocks on fears the central bank will go too far and put the economy in recession
Investors are focused on the Fed’s policy meeting starting on Tuesday, where the central bank is expected to raise interest rates by another three-quarters of a point. Investors are also awaiting guidance on corporate earnings before the next reporting season begins in October.
“It’s a very quiet session so far,” Adam Crisafulli of Vital Knowledge wrote in a note to clients. “Stocks are off their early morning lows, but sentiment remains very gloomy. The consensus book for the week seems to be predicting a brief rally around the FOMC, which most people plan to use as opportunity to take profits in preparation for further downside (many believe a return to the June lows is inevitable).
Five of the S&P 500’s 11 major sectors rose or traded flat, led by gains in consumer discretionary, industrials and materials. Financials also rose as some investors bet higher rates could benefit their bottom lines. Healthcare was the biggest laggard, with a 1.5% drop.
Stocks fell last week as investors reacted to a hotter-than-expected inflation report and a gloomy warning from FedEx about a “significantly worsening” global economy. The major averages posted their fourth weekly loss in five weeks and were near two-month lows.
Beyond the Fed meeting, there are only a few economic data releases this week, including August housing starts on Tuesday and initial jobless claims on Thursday.
—CNBC’s Patti Domm contributed reporting.