Stocks held steady in a calm day of trading Monday, but a storm may be coming.
This upcoming week is full of events that could swing markets: The Federal Reserve may raise interest rates, more countries around the world may move to shake up the economic status quo, and several high-profile updates on the U.S. economy are due.
That's all in the near future, though. Monday's calendar was decidedly light, and the Standard & Poor's 500 index flipped between modest gains and losses before closing at 2,373.47, up just 0.87 of a point, or 0.04%. It remains within 1% of its record high, which was set this month.
The Dow Jones industrial average fell 21.50 points, or 0.1%, to 20,881.48. The Nasdaq rose 14.06 points, or 0.2%, to 5,875.78. Three stocks rose for every two that fell on the New York Stock Exchange.
Urban Outfitters dropped 3.8% to $24.21, notching the biggest loss in the S&P 500. S&P Dow Jones Indices said Friday that it will remove the retailer from the S&P 500 index of large stocks and put it in the S&P 400 index of mid-cap stocks instead.
Mobileye, an Israeli autonomous-driving company, surged after it agreed to sell itself to Intel for $63.54 per share in cash. Its U.S.-listed shares rose 28.2% to $60.62. Intel slipped 2.1% to $35.16.
After the close of regular trading, Valeant Pharmaceuticals International dived nearly 10% when activist investor Bill Ackman said he sold his hedge fund's stake in the Canadian drugmaker. Ackman said the investment took up a "disproportionately large amount of time and resources." Valeant has tried to turn around its business amid government investigations and criticism of its aggressive price increases for critical heart drugs. Former executives and a related mail-order pharmacy were charged with a fraud-and-kickback scheme in November.
Even in such a hectic week, one event stands out from the rest: the Federal Reserve's meeting on interest rates, which begins Tuesday and ends Wednesday. Most investors expect the Fed to raise rates for the third time since they went to nearly zero during the financial crisis in 2008.
Usually, rising interest rates are bad news for stocks because they make borrowing more expensive and can be a drag on economic growth. But many analysts say this time may be different: As long as the pace is gradual, these increases will only be getting rates back to normal rather than slamming the brakes on the economy.
It was only a few weeks ago that many investors were expecting the Fed to stand pat at its March meeting and then raise rates later in the spring. But expectations have swung after the release of a series of strong reports on the economy. The headliner was Friday's jobs report, which showed healthy levels of hiring.
A year ago, such a swing in expectations may have meant a sell-off in stocks as investors worried about the impact of higher rates, said JJ Kinahan, chief market strategist at TD Ameritrade. Now, it has met with more equanimity because investors are focusing instead on the improving economy and hopes for bigger corporate profits in the future.
"It's a very good sign," Kinahan said. "It shows that people do have faith in stocks."
Investors probably will focus more on what Fed Chairwoman Janet L. Yellen has to say after the announcement than on the rate increase itself, which is expected to be a quarter of a percentage point.
"What the market is curious about is: How many more rate increases will there be, and what is the primary data that would drive that?" Kinahan said.
The job market has been on the upswing recently, and so has inflation. But a recent drop in the price of oil may pull down inflation levels, which could encourage the Fed to move more slowly. The government will offer updates this week on inflation at both the consumer and wholesale levels, along with reports on retail sales and other economic indicators.
The yield on the 10-year Treasury note rose to 2.61% from Friday's 2.58% and is approaching its highest level since 2014. The two-year yield rose to 1.37% from 1.35%, and the 30-year yield climbed to 3.21% from 3.16%.
The Fed isn't the only central bank meeting on interest rates this week. Others include the Bank of England and the Bank of Japan.
Many economists expect the Bank of England to hold steady, but another action in London could garner more attention. The government could formally begin the process of exiting the European Union. Britain voted last summer to leave the union, becoming one of several populations worldwide trying to throw off the status quo.
The Netherlands has its own election this week, where politicians have also railed against the European Union and immigrants. Later this year, elections will occur in France and Germany.
In Europe, France's CAC 40 rose 0.1%, Britain's FTSE 100 rose 0.3% and Germany's DAX rose 0.2%. In Asia, Japan's Nikkei 225 stock index rose 0.1%, South Korea's Kospi climbed 1% and the Hang Seng in Hong Kong jumped 1.1%.
The dollar largely held steady against its rivals. It dipped to 114.77 Japanese yen from 114.78 yen late Friday. The euro fell to $1.0660 from $1.0692, and the British pound rose to $1.2231 from $1.2177.
The price of a barrel of benchmark U.S. crude oil fell 9 cents to close at $48.40 a barrel. Brent crude, which is used to price international oils, slipped 2 cents to close at $51.35 a barrel in London. In other energy trading, wholesale gasoline fell 2 cents to $1.58 a gallon, heating oil was little changed at $1.50 a gallon and natural gas rose 3.5 cents to $3.043 per 1,000 cubic feet.
Gold rose $1.70 to settle at $1,203.10 an ounce, silver rose 5 cents to $16.97 an ounce and copper rose 3 cents to $2.63 a pound.
2:25 p.m.: This article was updated with closing prices, context and analyst comments.
1:35 p.m.: This article was updated with the close of markets.
7:25 a.m.: This article was updated with market figures and context.