By Chuck Mikolajczak
(Reuters) — U.S. stocks closed slightly higher on Monday as investors awaited guidance from a host of Federal Reserve policymakers later in the week on the central bank's policy path, with a large amount of bond supply also due to hit the market.
Equities last week posted their biggest weekly percentage gain in about a year, as a weaker-than-expected U.S. payrolls report on Friday sent Treasury yields lower on the view the Fed was done hiking interest rates and could start cutting them next year.
Market expectations that the Fed will hold interest rates steady at its December meeting stand at 90.4%, down from 95.2 on Friday but above the 74.4% a week ago. Expectations for a rate cut of at least 25 basis points have grown to more than 50% at the May 2024 meeting, according to CME's FedWatch Tool.
Markets will look for more clarity on the Fed's intentions from officials speaking later in the week, including Chair Jerome Powell, and voting members such as New York Fed chief John Williams and Dallas Fed President Lorie Logan.
«Unless something in the economic data prompts it, you won't see them change their tone,» said Stephen Massocca, senior vice president at Wedbush Securities in San Francisco.
Expectations the Fed was likely done with rate hikes sent the S&P 500 up 5.85% last week and the Nasdaq up 6.61%, their biggest weekly jumps since November 2022.
«Whatever that buying force was that sort of went rampant on Friday is not around today and so a lot of these names are drifting back down, and yields are a little higher,» said Massocca.
Meanwhile, the yield on the benchmark 10-year Treasury note, which slid to five-week lows on Friday, reversed course to reach a high of 4.668% on Monday, ahead of
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