U.S. stocks were struggling for direction Monday afternoon, pausing a rally after the S&P 500 logged its 16th winning week out of the last 18 and investors awaited a busy week that features congressional testimony by Federal Reserve Chair Jerome Powell and all-important jobs data.

What’s happening

  • The Dow Jones Industrial Average
    dipped 37 points, or 0.1%, to 39,048.

  • The S&P 500
    edged up 8 points, or less than 0.2%, to 5,145.

  • The Nasdaq Composite
    rose 4.4 points, or less than 0.1%, to trade at 16,283.

The S&P 500 rose 1% last week and has gained 7.7% this year, posting its 15th record finish of 2024 on Friday. The Nasdaq returned to record territory last week, posting its second straight all-time high finish on Friday.

What’s driving markets

There’s a busy slate of events this week as investors look to see whether anything can derail the rally. Powell will be on Capitol Hill this week for two days of congressional testimony, while the nonfarm-payrolls report gets released on Friday.

See: Stock rally, rate-cut forecasts face test from Powell testimony and jobs report

The recent rally in stocks has been driven mostly by investors responding to strong growth data, according to Bill Merz, head of capital markets research at U.S. Bank Wealth Management.

It may suggest that the combination of monetary and fiscal policies are “not that restrictive,” Merz said in a phone interview.

“If the S&P 500 is going to make this the eighth straight week it hits an all-time high, [investors] will likely need to hear encouraging words from Fed Chair Jerome Powell about rate cuts in his two days of congressional testimony and avoid any major surprises from this week’s jobs data,” Chris Larkin, managing director for trading and investing at E-Trade from Morgan Stanley, said in an email.

”The Fed has said it doesn’t need to see a significantly weaker labor market to cut rates, but if the numbers come in too hot, it could renew concerns about delays, at least temporarily,” Larkin said.

Atlanta Fed President Raphael Bostic said Monday that with the labor market strong and growth above trend, there isn’t pressure on the U.S. central bank to cut interest rates.

“The good news is the labor market and economy are prospering, furnishing the [Federal Open Market Committee] the luxury of making policy without the pressure of urgency,” Bostic said in an essay posted on his regional bank’s website.

Bostic, who is a voting member of the Fed’s interest-rate committee, quickly added that this could change.

Meanwhile, Bank of America became the latest Wall Street firm to lift its price target for the S&P 500, now forecasting that the index will see a year-end level of 5,400. The increased price target nonetheless was accompanied by a warning that the likelihood of a near-term pullback is high.

And it’s more than just U.S. stocks rallying: Bitcoin

surged past $65,000 and Japan’s Nikkei 225
zoomed past 40,000, while gold

drifted lower after ending Friday at a record high.

Companies in focus

  • JetBlue Airways Corp.

    and Spirit Airlines Inc.

    said Monday they have reached an agreement to terminate their July 2022 merger agreement, weeks after a federal judge said the $3.8 billion deal would reduce competition and hurt passengers. Spirit shares slumped 10.5%, while JetBlue shares rose 4%.

  • Macy’s Inc.

    shares were up more than 14% at $20.65 after investment firm Arkhouse Management and asset manager Brigade Capital Management boosted their bid for the department-store chain by nearly $1 billion to $6.6 billion. They raised their buyout proposal to $24 a share from $21, representing a 33% premium to Friday’s closing price of $18.01.

  • Shares of New York Community Bancorp

    fell more than 18%. Moody’s Inc. delivered its second debt downgrade in a month, citing the bank’s exposure to stressed loans for office space and rent-controlled multifamily apartments.

  • The European Union fined Apple Inc.

    nearly $2 billion for breaking the bloc’s competition laws by unfairly favoring its own music-streaming service over rivals’. Apple shares fell 2.3%.

  • Shares of data-server provider Super Micro Computer Inc.

    and footwear maker Deckers Outdoor Corp.

    traded higher, after S&P Dow Jones Indices late Friday said the companies would replace Whirlpool Corp.

    and Zions Bancorp

    in the S&P 500 beginning March 18.

Steve Goldstein contributed.

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