Market Overview and Federal Reserve Focus
The US stock market began the week with mixed performance as investors prepared for the Federal Reserve’s upcoming interest rate decision on Wednesday. While the S&P 500 managed to gain 0.4%, the Nasdaq surged 1.2% to close at a record high, supported by strength in communication and technology sectors. Meanwhile, the Dow Jones Industrial Average edged lower, slipping 0.3%.
Investors remain focused on the Federal Reserve’s policy trajectory as they widely anticipate another rate cut. Attention will also be on comments from Fed Chair Jerome Powell and other economic indicators due later this week, which could provide insight into the economy’s health and future monetary policies.
Broadcom and Tesla Lead Gains
Broadcom (AVGO) continued its upward momentum, soaring 11.2% on Monday and pushing the S&P 500 higher. The chipmaker’s stock surged past a $1 trillion market capitalization last week after reporting impressive quarterly results fueled by robust demand for artificial intelligence (AI) solutions. Analysts at Bernstein reinforced optimism by naming Broadcom one of their top semiconductor picks, alongside Nvidia (NVDA).
Tesla (TSLA) also stood out, climbing 6.1% to reach an all-time high. The electric vehicle giant benefited from Wedbush analysts’ bullish outlook on AI and full self-driving (FSD) technologies. Analysts estimated Tesla’s AI and FSD capabilities alone could hold a $1 trillion valuation potential. Confidence grew further on expectations that the incoming Trump administration might streamline regulatory processes for self-driving technology approvals.
n the US stock market, Micron Technology (MU) also posted notable gains, rising 5.6% as the chipmaker prepares to announce its quarterly earnings mid-week. Analysts predict strong year-over-year sales and profit growth. The company recently secured approximately $6 billion in federal grants under the CHIPS Act to expand semiconductor production in the United States.
Notable Losses and Sector Challenges
Super Micro Computer (SMCI) led the declines, dropping 8.3% after being one of three companies removed from the Nasdaq 100 as part of its annual rebalancing. The drop followed reports that Supermicro hired Evercore to assist with a potential capital-raising initiative, sparking investor concerns.
Pharmacy benefit management (PBM) businesses faced headwinds after President-elect Donald Trump proposed eliminating the so-called “middle man” to reduce prescription drug prices. A bipartisan bill introduced last week also aimed to separate PBM operations from pharmacy businesses. As a result, CVS Health (CVS) shares tumbled 5.6%, while major health insurers with PBM operations also saw declines.
Oil and gas stocks faced pressure as crude oil prices retreated following weaker-than-expected consumer spending data from China. This drop, combined with anticipation of the Fed’s decision, weighed on the energy sector. Phillips 66 (PSX) fell 5.2% after announcing its 2025 capital plan and the sale of its Texas natural gas pipeline interest. Similarly, Marathon Petroleum (MPC) shares declined 5.1%.
The mixed movement in the US stock market reflects growing caution as investors assess economic data, global trends, and evolving policies that could shape the financial landscape in the weeks ahead.
