Stocks Under Pressure as Brexit and Fed Decision Loom over Market

Stocks remained under pressure, though were off lows by mid-morning Monday, as Microsoft (MSFT) sold off after announcing it will buy LinkedIn (LNKD) .

Fears over a British exit from the European Union loomed over European markets and a Federal Reserve meeting also made for nervous trading. 

The S&P 500 was up 0.04%, the Dow Jones Industrial Average rose 0.02%, and the Nasdaq fell 0.1%.

LinkedIn rocketed higher after Microsoft announced it would purchase the professional social network in a cash deal worth $26.2 billion. The offer of $196 a share represents a 50% premium to LinkedIn’s closing price on Friday. The deal is expected to close this year.

Microsoft shares were in decline, though, falling nearly 3% and contributing to almost half of the Dow’s losses. 

European shares were under pressure as the vote for Great Britain to leave the EU draws closer. British citizens will vote in a referendum in 10 days and recent polls suggest a majority of people in favor of the exit. A “Brexit” would have major implications for the economic stability of the EU.

The Fed meets for a two-day meeting on Tuesday. A rate hike in June isn’t likely anymore, according to economists, but investors instead will be on high alert for any clues as to when another increase could come. The Fed meeting will conclude on Wednesday afternoon with a statement and fresh forecasts followed by a press conference helmed by Fed Chair Janet Yellen.

via The Street

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Alfonso Esparza

Alfonso Esparza

Senior Currency Analyst at Market Pulse
Alfonso Esparza specializes in macro forex strategies for North American and major currency pairs. Upon joining OANDA in 2007, Alfonso Esparza established the MarketPulseFX blog and he has since written extensively about central banks and global economic and political trends. Alfonso has also worked as a professional currency trader focused on North America and emerging markets. He holds a finance degree from the Monterrey Institute of Technology and Higher Education (ITESM) and an MBA with a specialization on financial engineering and marketing from the University of Toronto.
Alfonso Esparza