In the view of most economists, the Fed wants more time to assess the health of the US economy, the risks from overseas and the prospect that low inflation will soon reach the central bank’s 2 percent target rate.
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The country’s biggest banks were among the index’s most influential gainers with Bank of Nova Scotia up 0.9 per cent to $70.56 and Toronto-Dominion Bank advancing 0.6 per cent to $57.53.
Investors will also keep an eye on the Bank of Japan’s policy meeting on Tuesday and Wednesday, where it is largely expected to not announce further policy easing.
It remains to be seen whether the US central bank will manage to raise interest rates by December without triggering a bout of dollar strength, said Teppei Ino, an analyst for Bank of Tokyo-Mitsubishi UFJ in Singapore.
Bond yields edged higher and the dollar weakened. Analysts say the Fed is unlikely to immediately raise interest rates, but they are more uncertain about possible action by the Bank of Japan, whose options include a range of stimulus proposals.
It would be the fourth time in 15 months that the USA central bank has been forced to admit its estimate of this so-called neutral rate was too optimistic, raising questions about the health of the economy in the coming years. “They will want to prepare markets so that when do they move, it will be an nearly non-event”.
While advancing stocks far outnumbered fallers, the Dow Jones industrial average dipped 3.63 points, or less than 0.1%, to 18,120.17.
The S&P 500 posted 11 new 52-week highs and 3 new lows; the Nasdaq Composite recorded 95 new highs and 30 new lows.
Negative yields have not been the salve that was promised, and there are now more concerns about the health of banks which need a steeper curve to make money. JPMorgan Chase rose 72 cents, or 1.1 percent, to $66.54 and Bank of America rose 22 cents, or 1.5 percent, to $15.72.
United States electrical components distributor Avnet was up 8.4 percent at $42.5 after it announced the sale of its IT business to tech products distributor Tech Data Corp for about $2.6 billion.
Gold prices rose on Monday as the dollar slipped but gains were capped by jitters ahead of a Federal Reserve monetary policy meeting and a rise in USA government bond yields.
Despite the gains, the broader technology sector gave up an early advance and finished mostly lower.
Brent crude futures gained 0.4% to settle at $45.95 a barrel and U.S. crude gained 0.6% to settle at $43.30, off highs earlier in the day. Brent crude, used to price global oils, rose $1.02, or 2.2 percent, to $46.79 a barrel in London. The dollar was last steady on the day at 101.90 yen.
It reached session high at 1.3090 and hit low at 1.3019 levels.
Canadian Natural Resources Ltd. rose 1 per cent to $38.97 and Encana Corp. was up 2.3 per cent to $13.17. The index lost 1.3% last week, partly due to some Fed officials striking a dovish stance on rates.
Gold futures for December delivery gained 0.6 percent to settle at $1,317.80 an ounce at 1:38 p.m. on the Comex in NY, marking the biggest gain since September 6.
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Among the big banks, Westpac is declining 0.8 percent, Commonwealth Bank of Australia is down 0.3 percent and National Australia Bank is lower by 0.2 percent, while ANZ Bank is edging down 0.07 percent. The yield on the 10-year U.S. Treasury note remained at 1.69 per cent.
