U.S. Stocks Decline Amid Anticipation of Federal Reserve Rate Decision

Major U.S. stock indexes edged lower on Monday as investors awaited the Federal Reserve's upcoming interest rate decision, with the S&P 500 retreating after nearing its all-time high.

The Dow Jones Industrial Average declined by 0.3%, the S&P 500 fell 0.3%, and the Nasdaq Composite decreased 0.2%. This pullback follows a period where the S&P 500 approached its record closing high, buoyed by two consecutive weeks of gains.

Market participants are closely monitoring the Federal Reserve's meeting scheduled for Wednesday, where a decision on interest rates is anticipated. Recent economic data, including a subdued inflation report, has reinforced expectations of a potential rate cut. The CME Group's FedWatch tool indicates an 87% probability that the central bank will reduce its key rate by 25 basis points to a range of 3.5% to 3.75%.

In the bond market, the 10-year Treasury yield rose to 4.18% from 4.14% at Friday's close, influencing interest rates across various loans. Commodity markets saw gold futures decline by 0.7% to $4,215 per ounce, while West Texas Intermediate crude oil futures fell 1.2% to $59.35 per barrel.

In corporate developments, Netflix shares dropped approximately 4% following Paramount Skydance's hostile takeover bid for Warner Bros. Discovery, which had previously agreed to an $83 billion acquisition by Netflix. Warner Bros. Discovery shares increased by about 5.5%, and Paramount Skydance shares rose 6% in response to the news. Additionally, President Donald Trump commented on Sunday that Netflix's deal "could be a problem."

Confluent shares surged nearly 30% after IBM announced an $11 billion acquisition of the data-infrastructure firm. Conversely, Marvell Technology shares declined by 10% following reports that Microsoft is in discussions with Broadcom regarding custom chips, leading to a downgrade of Marvell's stock rating to "hold" from "buy."

Bitcoin was trading at $89,700, down from overnight highs around $92,300. The U.S. dollar index, which measures the greenback against a basket of foreign currencies, rose 0.2% to 99.20.