S&P 500; US Indexes Fundamental Daily Forecast – Plunge in Telecom Sector Drags Major Indexes Lower

U.S. stock index futures are trading modestly lower late in the session on Monday after giving up earlier gains. Losses are being fueled by a more than 2-percent loss in the telecommunications sector.

In the cash market at 1912 GMT, the benchmark S&P 500 Index is trading at 2658.31, down 11.60 or -0.43%. The blue chip Dow Jones Industrial Average is at 24253.47, down 57.72 or -0.24% and the tech-driven NASDAQ Composite is at 7085.51, down 34.29 or -0.48%.

The steep decline in the telecomm sector followed news Sunday that T-Mobile agreed to buy Sprint for $26.5 billion. Some analysts are skeptical the deal will get federal approval, and shares of both companies are trading sharply lower Monday.

The S&P 500 was dragged down as 10 of 11 sectors posted declines. The Dow was pulled down by a drop in Boeing shares. However, these losses were offset by solid gains in McDonald’s and Apple. The NASDAQ Composite was weighed by declines in shares of Microsoft.

With interest rates rising, investors should keep an eye out for aggressive stock buybacks and mergers. These companies want to get deals done before the cost of doing business makes it too expensive to complete the transactions.

Early in the trading session, Logistics company Prologis announced it was acquiring DCT Industrial Trust for $8.4 billion in an all-stock deal. DCT Industrial’s jumped more than 11 percent.

Marriott Vacations, the hotel’s chain’s timeshare business, is also buying rival ILG for $4.7 billion.

Additionally, shares of Andeavor surged 13.4 percent after Marathon Petroleum agreed to acquire it for $23 billion.

Some traders also blamed the sell-off on position-squaring ahead of Wednesday’s Federal Reserve monetary policy announcement. No one expects the Fed to raise rates at this meeting, but it is highly probable the central bank will raise its benchmark rate 25 basis points in June. The policymakers are expected to talk up the next rate hike with hawkish language in its monetary policy statements.