1. Dow Jones Extends Gains

On Monday, the Dow Jones Industrial Average closed higher, sustaining recent upward momentum, as investors anticipated a pivotal week marked by significant events, including fresh inflation data and the commencement of the Federal Reserve’s two-day meeting.

2. Broad Market Gains

By 16:00 ET (21:00 GMT), the benchmark S&P 500 recorded a 0.3% increase, and the 30-stock Dow Jones Industrial Average gained 0.43%, equivalent to 157 points. Both indexes achieved intraday highs, while the tech-heavy Nasdaq Composite rose by 0.20%.

3. Focus on Inflation and Fed Meeting

The Federal Open Market Committee (FOMC) is expected to maintain the current interest rates range of 5.25% to 5.50% during its Wednesday meeting. Investors keenly await the Fed’s economic projections, inflation insights, and indications of expected rate cuts for the upcoming year. This meeting follows the release of consumer inflation data, projecting a continued easing in price pressures.

4. Powell’s Remarks and Market Expectations

Fed Chair Jerome Powell’s comments will be closely scrutinized for any indication of a pushback against market expectations for an earlier-than-anticipated rate cut. In light of recent job data and a slowdown in underlying price gains, markets are now pricing in nearly a 50% chance of a quarter-point rate decrease by May.

5. Cigna Ends Humana Merger Talks

U.S. health insurer Cigna (CI) concluded talks to acquire peer Humana (HUM), with challenges in agreeing on a price, regulatory concerns, and a decline in share prices influencing the decision. Cigna plans additional share buybacks amounting to $10 billion.

6. Macy’s Surges on Buyout Offer

Macy’s (M) experienced a surge of over 19% following a reported $5.8 billion buyout offer from Arkhouse Management and Brigade Capital Management. The proposed price of $21 per share represents a 21% premium.

7. Big Tech Lags, Semiconductor Stocks Thrive

Major tech stocks, including Microsoft Corporation (MSFT) and Alphabet Inc Class A (GOOGL), faced declines. However, semiconductor stocks, such as Globalfoundries Inc (GFS), Applied Materials Inc (AMAT), and Broadcom Inc (AVGO), posted gains. Broadcom Inc rose over 8% after receiving a buy rating from Citi.

8. Occidental Petroleum’s Deal for CrownRock

Occidental Petroleum Corporation (OXY) announced a $12 billion deal to acquire shale oil driller CrownRock, emphasizing ongoing consolidation in the energy sector. This move follows Exxon Mobil’s (XOM) $6 billion takeover of Pioneer Natural Resources (PXD) earlier in the year.

9. Energy Sector Performance

In the energy sector, Hess Corporation (HES) and Baker Hughes Co (BKR) were among the top gainers, each rising over 1%, despite sluggish oil prices amid cautious trading ahead of the Fed meeting later in the week.