U.S. major stock indices ended lower on Monday as investors adopted a cautious stance ahead of the Federal Reserve's two-day policy meeting starting Tuesday, widely expected to conclude with a quarter-percentage rate cut.
The Dow Jones Industrial Average declined 215.67 points, or 0.45 percent, to 47,739.32. The S&P 500 dropped 23.89 points, or 0.35 percent, to 6,846.51. The Nasdaq Composite Index fell 32.22 points, or 0.14 percent, to 23,545.9.
Sector performance was broadly negative, with ten of the 11 primary S&P 500 sectors closing lower. Communication services and materials were the primary underperformers, falling 1.77 percent and 1.66 percent, respectively. The technology sector stood out as the lone gainer, advancing 0.93 percent.
Market participants remain highly confident in a rate reduction at Wednesday's policy announcement, with the CME FedWatch Tool indicating an 88 percent probability of a 25-basis-point cut, up from 67 percent a month earlier.
"The market action you've seen the last one or two weeks is kind of essentially baking in the very high likelihood of a 25 basis point cut," said Stephen Kolano, chief investment officer at Integrated Partners. "For some very unlikely reason, if they don't cut, forget it. I think markets are down 2 percent to 3 percent."
A slight uptick in the 10-year U.S. Treasury yield to approximately 4.17 percent from Friday's close of 4.14 percent contributed to pressure on equity valuations, as higher yields can make bonds more attractive relative to stocks.
In corporate news, Nvidia shares rose 1.72 percent amid reports that the Trump administration is preparing to approve sales of the company's advanced H200 artificial intelligence chips to China. Additionally, shares of Carvana and CRH surged following confirmation that they will join the S&P 500 index.
The media sector saw significant developments as Warner Bros. Discovery shares surged on news that Paramount launched a 108-billion-U.S.-dollar hostile takeover bid for the entire company, potentially disrupting Netflix's previously announced agreement to acquire Warner Bros. Discovery's studios and streaming operations. Netflix shares declined more than 3 percent in response.
U.S. stocks fall amid caution ahead of Fed decision
China's Minister of Commerce Wang Wentao outlined the key priorities of the 32nd Asia-Pacific Economic Cooperation (APEC) Ministers Responsible for Trade Meeting, which opened on Friday in Suzhou, East China's Jiangsu province.
In an interview with CGTN ahead of the two-day meeting, Wang said free trade, digital cooperation and green economy are high on the agenda of the meeting.
"The key areas include advancing regional economic integration and the Free Trade Area of the Asia-Pacific, supporting the World Trade Organization (WTO) in strengthening digital cooperation and developing green economy. At present, the international situation is marked by intertwined turbulence and chaos, with intensified geopolitical instability. The rise of unilateralism and protectionism poses serious challenges to the international economic and trade order, disrupting global and Asia-Pacific development. Against this backdrop, all parties have higher expectations for this trade ministers' meeting, hoping that it can build consensus and deliver outcomes," Wang said.
This year marks China's third time hosting the APEC meetings and the 35th anniversary of its membership.
By 2025, China had become the largest trading partner of 13 APEC economies. Trade between China and APEC economies reached 3.7 trillion U.S. dollars, accounting for 57.8 percent of China's total foreign trade.
China has signed 24 free trade agreements or economic and trade arrangements with 31 countries and regions, including 15 APEC economies. In recent years, China has also completed upgrades of free trade agreements with APEC economies such as Singapore and Peru.
The minister said that China has always been a firm supporter and an important contributor to APEC.
"We have actively shared our vast market and development opportunities with all parties. China's door to the world will only open wider and wider. Facing the common challenges, China will continue to fulfill its responsibilities as a major country, further deepen reform, expand high-standard opening-up, and continue to provide new opportunities for the Asia-Pacific region and the world with its new achievements in Chinese modernization," the minister said.
China's Commerce Minister outlines priorities for 32nd APEC trade ministers' meeting
