Wall Street falls awaiting Fed decision, Apple drags down Nasdaq

The S&P 500 fell 0.2%, while the Nasdaq Composite dropped 0.9%. The Dow Jones Industrial Average rose 0.5%.

Apple shares are down more than 2% in early trading after analysts at firms including Bank of America and JPMorgan said Shipping times could point to lighter demand for iPhone 16 Pro models compared to last year.

He S&P 500 is less than 1% away from its July record and could hit a new all-time high this week. After a rocky start to a historically weak September, all three major U.S. indexes ended last week’s trading session in the green, with the S&P 500 and the tech-heavy Nasdaq Composite closing out their best week of 2024.

Wall Street: The key to the Fed

The Federal Reserve meets on Tuesday and Wednesday and is widely expected to make its first interest rate cut since it began raising rates in March 2022. A cut this week would be a crucial move, as many investors hope the decision could lower borrowing costs for companies and improve overall earnings growth, boosting economic growth.

The overnight lending rate is currently between 5.25% and 5.5%. Traders are divided on whether the central bank will cut rates by 25 or 50 basis points, according to the CME Group’s FedWatch tool.

Stocks typically post strong gains during cycles in which initial rate cuts succeed in sustaining economic expansion, according to BMO Capital chief investment strategist Brian Belski.

“As long as the economy doesn’t suffer a breakdown, U.S. stocks remain firmly within a bull market, but with remarkably strong performance over the past 12 months, heading into this initial rate cut, future gains are likely to be more moderate relative to historical norms, in our view,” he said in a note on Friday.