U.S. Stocks Holding On To Gains In Afternoon Trading

After moving modestly higher early in the session, stocks are seeing continued strength in afternoon trading on Monday. With the upward move, the tech-heavy Nasdaq is on pace to end the session at its best closing level in well over a year.

The major averages have moved roughly sideways in recent trading, holding on to gains. The Nasdaq is up 107.75 points or 0.8 percent at 13,366.90, the S&P 500 is up 18.09 points or 0.4 percent at 4,316.95 and the Dow is up 108.55 points or 0.3 percent at 33,985.33.

The strength on Wall Street comes as traders look ahead to the Federal Reserve’s highly anticipated monetary policy announcement on Wednesday.

The Fed is widely expected to pause its recent interest rate increases but is also likely to reiterate its commitment to bringing inflation down to its 2 percent target.

CME Group’s FedWatch Tool is currently indicating a 75.8 percent chance the Fed will leave rates unchanged but a 54.7 percent chance of another quarter point rate hike next month.

The Fed’s accompanying statement is likely to have a significant impact on the outlook for rates along with some closely watched inflation data due to be released in the coming days.

Overall trading activity has remained relatively subdued, however, with a lack of major U.S. economic data keeping some traders on the sidelines.

Semiconductor and networking stocks are seeing considerable strength on the day, contributing to the advance by the Nasdaq.

Reflecting the strength in the sectors, the NYSE Arca Networking Index and the Philadelphia Semiconductor Index are up by 2.6 percent and 2.4 percent, respectively.

Significant strength also remains visible among airline stocks, with the NYSE Arca Airline Index climbing by 1.5 percent to its best intraday level in over a year.

Software, retail and housing stocks are also seeing notable strength, while energy stocks are moving lower along with the price of crude oil.

With crude for July delivery plunging $2.65 to $67.52 a barrel, the Philadelphia Oil Service Index and the NYSE Arca Oil Index are down by 1.8 percent and 1.3 percent, respectively.

Banking stocks have also come under pressure over the course of the session, dragging the KBW Bank Index down by 1.3 percent.

In overseas trading, stock markets across the Asia-Pacific region turned in a mixed performance during trading on Monday. Japan’s Nikkei 225 Index rose by 0.5 percent, while China’s Shanghai Composite Index slipped by 0.1 percent.

Meanwhile, the major European markets all moved to the upside on the day. While the German DAX Index advanced by 0.9 percent, the French CAC 40 Index climbed by 0.5 percent and the U.K.’s FTSE 100 Index inched up by 0.1 percent.

In the bond market, treasuries turned lower over the course of the session after seeing early strength. As a result, the yield on the benchmark ten-year note, which moves opposite of its price, is up by 2.7 basis points at 3.772 percent.

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