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Nasdaq and S&P 500 Close at Records Ahead of Key Fed Meeting

The Dow slips on Monday but the S&P 500 and Nasdaq close at record highs as Wall Street prepares for a key meeting of the Federal Reserve later this week.

The Nasdaq and the S&P 500 on Monday closed at records as Wall Street prepared for a key meeting of the Federal Reserve later this week.

The S&P 500 closed up 0.18% to 4,255 to mark its third consecutive record closing high, while the Nasdaq climbed 0.74%. 

The Dow Jones Industrial Average fell 85 points, or 0.25%, to 34,393. The blue chips on Monday traded off as much as 0.8%.

The S&P 500 on Friday posted its second consecutive record close, with investors assessing the Federal Reserve's stance that inflation spikes will prove to be transitory. The S&P 500 rose 0.4% last week.

It's Still a Stock Picker's Market but the Fed Could Shake Things Up

The big event this week will be an announcement on interest rates from the Federal Reserve's policy-setting body, the Federal Open Market Committee, on Wednesday, followed by a news conference from Fed Chairman Jerome Powell.

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The U.S. central bank isn't expected to take any action with respect to rates or a tapering of monthly asset purchases. Wall Street will be monitoring the meeting closely, however, for the Fed's forecasts on inflation and the strength of the economic recovery.

The Fed meets Tuesday and Wednesday amid a backdrop of the fastest rise in consumer prices in more than a decade and persistent questions about the nature - and staying power - of inflation as the economy nears its full exit from the coronavirus pandemic.

Any hint from Powell that inflation pressures may spark discussions about slowing the pace of the Fed's $120 billion in monthly bond purchases could rattle markets. A reiteration of the central bank's view that inflation pressures are "transitory" likely will add to market bullishness.

Paul Tudor Jones: Next Fed Meeting Most Important of Jerome Powell's Career

The yield on the benchmark 10-year Treasury rose to around 1.499%. It hit a three-month low last Thursday.

Bitcoin rose 4.5% to $39,853 after Tesla  (TSLA) - Get Report Chief Executive Elon Musk said his electric-vehicle company would resume transactions with the world's largest cryptocurrency when mining is done with more "clean energy usage."