By Ankika Biswas and Shristi Achar A
(Reuters) — Wall Street's main indexes were subdued in choppy trading on Monday as some megacap and chip stocks declined in the run-up to the Federal Reserve's interest rate decision later this week.
Treasury yields edged higher on uncertainty around the U.S. interest-rate trajectory through the year-end, pressuring some major growth names including Nvidia (NASDAQ:NVDA) and Tesla (NASDAQ:TSLA), down 3.1% and 3.8%, respectively. Apple (NASDAQ:AAPL) bucked the broader trend to rise 1.1%.
UK-based chip designer Arm Holdings (NASDAQ:ARM), which had a stellar debut on Thursday, dropped 6.1% after Bernstein started covering the stock with an «underperform» rating.
A slump in chipmakers on concerns over weak demand and a slide in megacap growth stocks had driven the S&P 500, the Nasdaq and the Dow to their worst single-day fall on Friday since Aug. 24, with the indexes losing between 0.8% and 1.5%.
A recent inflow of hotter-than-expected economic data has eased concerns about a potential recession, without raising fears of a September rate hike, though an uptick in crude prices threatens to keep inflation elevated, with oil prices firming on Monday.
Stronger crude prices, however, made the energy sector a bright spot among major S&P 500 segments, up 0.5%.
«Oil prices have entered into the narrative now and the Fed will consider this,» said Peter Andersen, founder of Andersen Capital Management.
«There will be a pause in September as indicated by the futures market. It is very important that we watch the upcoming CPI numbers and the employment numbers because they could have a strong impact on the way the Fed will wrap up the year.»
Traders largely expect the Fed to keep rates unchangedRead more on investing.com