Equities subdued; investors assess Fed rate path

The Dow and S&P 500 slipped on Monday, the first session after the biggest weekly percentage gains for the indexes this year, as investors gauged the likely path of interest rates from the Federal Reserve ahead of key inflation data due later in this holidayshortened week.

Last week, the Fed maintained its guidance for three interest-rate cuts this year, and the S&P 500 and Dow had strong gains while the Nasdaq notched its biggest weekly percentage gain since mid-January.

The Dow Jones Industrial Average fell 162.13 points, or 0.41%, to 39,313.77; the S&P 500 lost 15.97 points, or 0.31%, to 5,218.21; and the Nasdaq Composite lost 44.35 points, or 0.27%, to 16,384.47.

Expectations for a Fed rate cut in June were again increasing, with markets now pricing in a 71.9% chance for a cut of at least 25 basis points, according to CME’s FedWatch Tool, up from around 54.7% a week ago.

The February reading of the Personal Consumption Expenditures price index, the Fed’s preferred inflation gauge, is due on Friday, when U.S. markets will be closed for the Good Friday holiday.