U.S. financial markets experienced a positive shift on Monday, with major indices showing gains ahead of the Federal Reserve's upcoming monetary policy decision. The Dow Jones Industrial Average rose by 28.03 points, or 0.1%, reaching 43,856.09. The Nasdaq Composite increased by 120.95 points, or 0.6%, to 20,047.67, while the S&P 500 climbed 20.01 points, or 0.3%, to 6,071.10.
Market sentiment appears buoyed by expectations of an interest rate cut, with the CME Group's FedWatch Tool indicating a 99.1% probability of a 25 basis point reduction. Investors are closely monitoring the Fed's statement and economic projections, particularly regarding inflation trends that may affect future rate adjustments.
In economic news, the Federal Reserve Bank of New York reported a significant decline in regional manufacturing activity, with its general business conditions index dropping to 0.2 in December from 31.2 in November. Despite this, firms remain optimistic about future conditions, though the index for future business activity fell to 24.6.
In sector performance, networking and semiconductor stocks showed notable strength, with the NYSE Arca Networking Index hitting a record high. Conversely, oil and gold stocks faced downward pressure.
Internationally, Asian markets mostly declined, with Japan's Nikkei 225 closing near flat and China's Shanghai Composite down by 0.2%. European markets also reported losses, with the French CAC 40, German DAX, and U.K. FTSE 100 all declining.
In the bond market, modest strength was observed, with the yield on the benchmark ten-year note decreasing by 1.2 basis points to 4.387%.