U.S. stocks edged lower with the Dow Jones falling nearly 100 points, while Nvid

* The three major indices weakened at the close, with the Nasdaq down 0.4%;

* Long-term U.S. Treasury yields rose, with the benchmark 10-year U.S. Treasury note returning to 4.20%;

* Tesla fell over 7% as the company announced a new round of price discounts and incentive measures.

On Monday, U.S. stocks edged lower as investors awaited a busy week, with Federal Reserve Chairman Powell set to testify before Congress and the U.S. preparing for crucial employment data. By the close, the Dow Jones fell 97.55 points, or 0.25%, to 38,989.83, the Nasdaq fell 0.41% to 16,207.51, and the S&P 500 index fell 0.12% to 5,130.95. The communication services and non-essential consumer goods sectors led the decline, while the defensive sector of utilities led the market.

Market Overview

On the individual stock front, Nvidia rose 3.6%, with the chip giant's market value briefly surpassing $2.2 trillion during the session, overtaking Saudi Aramco to become the world's third-largest publicly traded company.

Apple fell 2.5% as the European Union fined Apple €1.84 billion (approximately $2 billion) for violating EU competition laws by unfairly favoring its own music streaming service.

Tesla plummeted 7.2% following the company's announcement of new price discounts and incentive measures. Advanced Micro Devices (AMD) jumped 18.6% as the S&P 500 index announced it would include it as a constituent later this month.

Advertisement

MicroStrategy surged 24%. The company announced it would issue $600 million in convertible senior notes, with plans to use the net proceeds from the sale of the notes to purchase additional bitcoin and for general corporate purposes. Bitcoin briefly approached $67,000 during Monday's session, continuing its assault on the all-time high.

Macy's rose 13.5% as investment firm Arkhouse Management and asset management company Brigade Capital Management raised their bid for the venerable retailer by nearly $1 billion to $6.6 billion, increasing from $21 per share to $24, a 33% premium over last Friday's closing price.This week, Federal Reserve Chairman Powell will testify on the semi-annual monetary policy report to the House of Representatives on Wednesday and to the Senate on Thursday.

Chris Larkin, Managing Director of Trading and Investing at Morgan Stanley E-Trade, said: "For the S&P 500 to make history with an eighth consecutive week of record highs, it may require some inspiring words from Fed Chairman Powell on rate cuts during the two-day congressional testimony and to avoid any significant surprises from this week's employment data." He added, "The Fed has indicated that it doesn't need to see a significant weakening in the labor market to cut rates, but if the data comes in too hot, it could reignite concerns about delays, at least temporarily."

Atlanta Fed President Raphael Bostic said on Monday that higher-than-expected inflation data in January serves as a reminder that the path to price stability is "not a smooth one." "I need to see more progress before I can fully believe that the inflation rate will definitely reach an average of 2% over time. Only when I gain this confidence will I feel that it is time to start lowering the federal funds rate to remove restrictive monetary policy."

Long-term U.S. Treasury yields rose, dampening market sentiment. The 2-year U.S. Treasury note, closely linked to rate expectations, rose to 4.60%, marking the largest increase in nearly two weeks, while the benchmark 10-year U.S. Treasury note approached the 4.20% mark at the close.

Scott Wren, Senior Global Market Strategist at Wells Fargo Investment Institute, said, "The market is still trying to digest the outlook for the economy, earnings, and the Fed, and some institutional money cannot stand by as the S&P 500 rises daily, while retail investors begin to worry about missing out on the rally. Although stocks are expensive now, this does not mean that the market cannot go further before some kind of pullback."

Labor conditions will also be in focus this week, with the ADP employment survey and January job openings data to be released on Wednesday, and the February non-farm employment data to be released on Friday.

Bank of America has become the latest institution to raise its target for the U.S. stock market, predicting that the S&P 500 could reach 5,400 points by year-end. Despite this, BofA believes that the likelihood of a market pullback in the near term is high.

After the OPEC+ decision to extend production cuts, the crude oil market experienced a sell-off following a sharp rise and profit-taking. The near-month WTI crude oil contract fell by 1.54%, trading at $78.74 a barrel, while the near-month Brent crude oil contract fell by 0.90%, trading at $82.80 a barrel.

Benefiting from expectations of rate cuts, international gold prices rose significantly. The COMEX gold futures contract for delivery in April on the New York Commodity Exchange increased by 1.48%, trading at $2,117.70 per ounce.