As of press time, the Dow rose 0.48%, hitting a new all-time high during the session; the Nasdaq fell nearly 1%, and the S&P rose 0.2%.

The S&P 500 index is currently less than 1% away from the historical high set in July, and it may reach a new all-time high this week.

Historically, the US stock market is usually weak in September. After a difficult start to September, the three major US stock indexes closed higher last week, marking their best week since 2024.

The Federal Reserve will hold its monetary policy meeting on Tuesday and Wednesday this week, and it is widely expected that the Fed will cut interest rates for the first time since March 2022.

The interest rate cut this week is significant because many investors hope that this decision can lower corporate borrowing costs, improve overall profits, and promote economic growth.

The current interest rate range set by the Fed is 5.25% to 5.5%.

Although traders have raised their expectations for a significant interest rate cut by the Fed, there is divergence among traders as to whether the central bank will cut rates by 25 basis points or 50 basis points this week, with bets on both a 25 basis points and 50 basis points cut almost evenly matched.

The futures market shows that traders believe there is a 60% chance of a 50 basis point rate cut by the Federal Reserve this week, significantly up from 30% a week ago. Media reports have reignited expectations for a larger rate cut in the market.

The interest rate swaps corresponding to the Federal Reserve's decision on Wednesday currently indicate a 50% chance of a 50 basis point rate cut, while last week this possibility was almost completely ruled out. The two-year U.S. Treasury yield has fallen to a two-year low, dragging down a measure of the U.S. dollar to its weakest level since January.

The sharp shift in market pricing over the past few trading days has increased uncertainty about the September 18 meeting. Investors feel conflicted about how much policy support the economy needs and what signal the Fed would send by initiating a substantial rate cut to start this easing cycle.

Analysts at Edmond de Rothschild wrote in a report, "Rarely has there been such great uncertainty about central banks' intentions as there is now. They are torn between signals of economic weakness and inflation stubbornly resisting returning to the 2% target."

Philip Marey, senior U.S. strategist at Dutch bank Rabobank, said, "It's difficult to determine," and he expects the Fed to cut rates by the usual 25 basis points. "Powell hasn't given any guidance, which may mean that the FOMC has not reached a consensus. In addition, retail sales data on Tuesday could still change the Fed officials' judgment."

Federal Reserve members are in a quiet period before the policy meeting on September 17-18, and traders have limited data to rely on, including August retail sales data to be released on Tuesday.

Rodrigo Catril, strategist at National Australia Bank, said, "We believe the new easing cycle that the Federal Reserve is about to embark on is a significant weakness for the U.S. dollar. As the Fed eases policy and lowers interest rates to neutral or even below neutral levels by next year, the dollar will decline cyclically."

Kathleen Brooks, Research Director at XTB, said, "Whether the Federal Reserve cuts rates by 25 basis points or 50 basis points, the market reaction will depend on two factors: how the Fed conveys the message of the rate cut and the reasons they choose for a 50 basis point cut, as well as the Fed members' expectations for terminal interest rates revealed in the 'dot plot.'"

Brooks said, "If the Federal Reserve starts cutting interest rates by 50 basis points, but at the same time reiterates that it is to maintain a soft landing for the economy, then this would be positive for the stock market. If the Federal Reserve appears to be forced to panic cut interest rates due to certain uncertainties, then it is expected that the stock market will sell off."

Joyce Chang, Global Research Chair of JPMorgan Chase, said that the Federal Reserve has room to take more aggressive actions, and doing more now may convey the right signal.

Mike Wilson, strategist at Morgan Stanley, believes that if labor data deteriorates further, regardless of whether the initial interest rate cut by the Federal Reserve is 25 basis points or 50 basis points, the market may exhibit a "flight to safety" sentiment. But if employment data improves, a continuous 25 basis points interest rate cut by mid-2025 may further support stock valuations.

Brian Belski, Chief Investment Strategist at BMO Capital, said that during the period in which the initial interest rate cut can sustain economic expansion, the stock market tends to rally strongly.

He said, "As long as the economy does not encounter any unexpected situations, the U.S. stock market is firmly in a bull market, but we believe that due to the very strong economic performance in the year before the first interest rate cut, the future rise in the U.S. stock market may be more moderate relative to historical norms."

Focus stocks

Most of the popular technology stocks are down, with Nvidia and Apple falling more than 3%, and Tesla falling more than 2%. However, Oracle is up more than 3% against the market trend.

China concept stocks are mixed, with Bilibili down nearly 3%, NIO down more than 2%, and Baidu and JD.com up slightly.

$Apple (AAPL.US)$ Dropped more than 3%, analysts said the pre-order sales of the iPhone 16 series on the first weekend decreased by about 12.7% compared to the 15 series last year.

$Intel (INTC.US)$ Rose nearly 2%, reported that the company finally met the qualifications to manufacture semiconductor components for the Pentagon, and is expected to receive contracts worth as much as $3.5 billion.

$Trump Media & Technology (DJT.US)$ Dropped more than 1%, Trump encountered an attempted assassination plot while playing golf in Florida on the 15th. Trump is unharmed and the suspect has been detained.

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