US stocks eased on Monday as traders settled in for a week shaped by the Federal Reserve’s final policy call of the year.
The Dow Jones Industrial Average fell 0.5%, the S&P 500 slipped 0.3%, and the Nasdaq Composite finished flat. The softer start followed Friday’s gains, when cooler inflation data boosted sentiment.
Confidence remains high that the Fed will cut rates on Wednesday. Market pricing now shows an 88% chance of a quarter-point move, up from 67% a month ago. A subdued September PCE reading on Friday kept conviction intact and helped the major indices chalk up back-to-back weekly advances.
Still, the meeting could expose the divide inside the central bank. Some policymakers remain wary of inflation’s persistence, while others argue that the labour market is the bigger worry. Support from influential Fed officials has strengthened the case for a third cut this year, though expectations for 2026 are less settled.
A busy run of economic data will guide the mood, with the delayed October JOLTS report landing on Tuesday and offering a read on job openings, layoffs and quitting trends.
In M&A news, Warner Bros Discovery jumped after Paramount launched a $108 billion hostile bid for the group, throwing Netflix’s planned takeover off course and sparking what could become one of the year’s most aggressive media battles.
London equities also struggled. The FTSE 100 dipped 0.2% to 9,645.09 as investors stayed cautious ahead of Wednesday’s Fed outcome and Unilever slumped sharply. The FTSE 250 fell 0.7% and the AIM All-Share dropped 0.4% to 748.52.
Unilever slid 6.6% after the Magnum Ice Cream carve-out began trading in Amsterdam, London and New York. Shares in the newly listed business opened 1.3% above the €12.80 reference price, valuing it at €7.94 billion, although that fell short of some forecasts. The split increased pressure on the parent group and weighed on the wider index.
Housebuilders weakened as UK gilt yields pushed higher. Barratt Redrow fell 4% and Persimmon dropped 3.5%. Defence names provided rare support, with Babcock up 2.6%, BAE Systems up 1.1% and Rolls Royce rising 2.1% after securing an order for more than 300 Leopard 2 tank engines from KNDS.
In the FTSE 250, Kainos jumped 6.6% after a double upgrade from Bank of America, while Baltic Classifieds rebounded 5.9% following last week’s slide.
