US stocks declined on Monday morning at the Wall Street Stock Exchange after rising at the end of last week, amid growing hopes that the US Federal Reserve will cut interest rates at the upcoming Federal Open Market Committee meeting next month. The broader S&P 500 index fell by 0.2%, while the Dow Jones Industrial Average dropped by 192 points or 0.4% by 10:25 AM Eastern Time. The Nasdaq Composite recovered its losses early in the session to close at Friday’s level. Shares of the popular beverage company Keurig Dr Pepper fell by 7.5% following its approval to acquire the Dutch company JDE Peet’s, owner of the well-known coffee brand Peet’s, in a deal that could reach $18 billion. Treasury yields rose after a significant drop on Friday, with the 10-year yield rising to 4.29% from 4.25%, and the 2-year yield increasing to 3.73% from 3.70%.

European stock markets showed mixed performance, while most Asian markets declined at the close. Wall Street continues to overwhelmingly bet that the Federal Reserve will cut interest rates at its next meeting in September, with traders expecting a 25 basis point cut with an 86% probability according to CME Group data. The Fed has kept rates steady since the end of 2024 amid inflation concerns and the impact of tariffs on the economy affecting companies and households. Meanwhile, the Fed’s concern about the US labor market is growing, as its main role is to keep inflation low while maintaining a strong labor market.