Stocks ended slightly higher on Monday as investors adopted a cautious stance going into this week's Federal Reserve meeting and amid renewed tariff threats from the White House.
The U.S. central bank will begin its two-day rate-setting meeting Tuesday in Washington against a backdrop of moderately improving consumer strength and a broader economy growing at around 2.1%.
Fed-watchers aren't expecting any changes to interest rates when the Fed makes a statement Wednesday afternoon, but will be looking for signals from Chairman Jerome Powell as to how -- and when -- the central bank will react to low inflation and a trade-led slowdown in the global economy.
"The current shape of the yield curve implies a 0.25% rate cut within the next three months," said Jason Pride, chief investment officer of private wealth for Glenmede. "Importantly, there appear to be no instances since 1995 in which the yield curve had suggested a cut that did not occur."
The Dow Jones Industrial Average rose 22 points, or 0.09%, to 26,112, the S&P 500 climbed 0.09%, and the Nasdaq advanced 0.62%.
Investors were treading carefully, however, after Commerce Secretary Wilbur Ross said on CNBC that President Donald Trump is ready to proceed with tariffs on $300 billion in Chinese goods if the two sides can't reach a trade pact.
More than 300 companies are scheduled to testify before the Office of the U.S. Trade Representative this week, with many warning that Trump's plan to impose the additional tariffs on Chinese imports will hurt consumers and hamper business growth. Last week, a White House spokesman said Trump and Chinese President Xi Jinping will likely meet on the sidelines of the Group of 20 summit later this month in Japan.
Pfizer (PFE - Get Report) said it agreed to acquire Array Biopharma (ARRY - Get Report) in an all-cash deal that values the cancer drug specialist at around $11.4 billion. Pfizer was up slightly to $42.88, while Array Biopharma soared 57% to $46.44.
Facebook (FB - Get Report) shares advanced 4.2% to $189.01, while Bitcoin prices traded firmly past the $9,000 level, as investors prepared for Tuesday's "white paper" from the social media group outlining its plans for a platform cryptocurrency. Facebook is Real Money's Stock of the Day.
Boeing ( BA - Get Report) CEO Dennis Muilenburg was apologetic over two deadly crashes of the company's now grounded 737 MAX model heading into the start of the Paris Air Show Monday, and insisted that its safe return to action was more important than establishing a speedy timetable.Shares rose 2.2% to $354.90, as Boeing jumped to the top of the Dow after forecasting the global aerospace and defense market would be worth $9 trillion over the next 10 years up from $8.1 trillion a year ago. ExxonMobil (XOM - Get Report) and Cisco (CSCO - Get Report) rounded out the top three.
Sotheby's (BID - Get Report) auction house soared 58.6% to $56.13 after announcing that it was being acquired by BidFair USA, an entity wholly owned by media and telecom entrepreneur and art collector, Patrick Drahi.
In economic news, the Empire State manufacturing index fell 26.4 points to negative 8.6 in June, the New York Federal Reserve Bank said Monday, the largest monthly decline on record and the first negative reading for the index in more than two years. Economists had expected a reading of positive 10.
Builder confidence in the market for newly built single-family homes fell two points to 64 in June, according to the National Association of Home Builders/Wells Fargo Housing Market Index. Sentiment levels have held at a solid range in the low- to mid-60s for the past five months.
"While demand for single-family homes remains sound, builders continue to report rising development and construction costs, with some additional concerns over trade issues," Greg Ugalde, the association's chairman, said in a statement.
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