Wall Street’s major indexes closed lower yesterday, Monday, March 25th, during a short week due to the Easter holidays. This comes amidst a calendar packed with important data releases and ongoing investor analysis of the Federal Reserve’s (Fed) potential interest rate path.

Last week’s bullish rally following the Fed meeting propelled Wall Street to record highs, but the market is now taking a breather. The S&P 500 lost 15.43 points, or about 0.3%, closing at 5,219.02 units. The Dow Jones Industrial Average fell 164.21 points, or about 0.4%, to 39,317.15 units. The Nasdaq dropped 44.35 points, or about 0.3%, closing at 16,384.47 units.

Fed rate cuts: dfferingopinions

While some, like Chicago Fed President Austan Goolsbee, estimate three rate cuts this year, others, like central bank Governor Lisa Cook, advocate for caution until the timing is right.

Market expectations currently reflect a 75% chance of a 25-basis-point Fed rate cut by June.

Wall Street on track for fifth straight month of gains

The U.S. market is poised for its fifth consecutive month of gains, with major stock indexes reaching new record highs at last week’s close. The S&P 500 gained nearly 2.3% the previous week, while the Dow Jones rose nearly 2% for its best week since December, briefly touching the 40,000 mark. The Nasdaq climbed nearly 2.9% over the same period.

These gains were fueled by the recent comments from the Federal Reserve, indicating continued interest rate cuts throughout 2024. Additionally, investor enthusiasm for technology stocks remains high, driven by the ongoing artificial intelligence rally.

According to the latest American Investors Association’s Weekly Individual Investor Sentiment Survey, investor sentiment continues to exceed historical averages, reflecting ongoing market optimism.