Investor Sentiment Improves Following Services PMI; S&P 500 Slips From Record Levels

The CNN Money Fear and Greed index showed further improvement in overall market sentiment, but it remained in the "Greed" zone on Monday.

U.S. stocks closed lower on Monday, with the S&P 500 index falling from record highs amid a surge in Treasury yields.

Fed Chair Jerome Powell and Minneapolis Fed President Neel Kashkari warned that monetary policy may remain restrictive for a while due to the remarkable economic resilience.

Caterpillar Inc CAT posted better-than-expected earnings for its fourth quarter on Monday. McDonald’s Corporation MCD, meanwhile, posted weaker-than-expected sales for its fourth quarter.

On the economic data front, the ISM services PMI for the US rose to 53.4 in January versus 50.5 in the prior month, topping market estimates of 52.

Most sectors on the S&P 500 closed on a negative note, with materials, utilities, and real estate stocks recording the biggest losses on Monday. However, information technology and healthcare stocks bucked the overall market trend, closing the session higher.

The Dow Jones closed lower by around 274 points to 38,380.12 on Monday. The S&P 500 fell 0.32% at 4,942.81, while the Nasdaq Composite fell 0.20% at 15,597.68 during Monday’s session.

Investors are awaiting earnings results from Ford Motor Company F, Cummins Inc. CMI, Cummins Inc. LLY, and Chipotle Mexican Grill, Inc. CMG today.

At a current reading of 73.4, the index remained in the "Greed" zone on Monday, versus a prior reading of 70.5.

What is CNN Business Fear & Greed Index?

The Fear & Greed Index is a measure of the current market sentiment. It is based on the premise that higher fear exerts pressure on stock prices, while higher greed has the opposite effect. The index is calculated based on seven equal-weighted indicators. The index ranges from 0 to 100, where 0 represents maximum fear and 100 signals maximum greediness.

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