Aramark fell 5.2 per cent after the company reported a profit for the latest quarter that fell short of analysts’ expectations. The company, which offers food and facilities management for schools, national parks and convention centres, also said it expects an underlying measure of profit to grow between 20 per cent and 25 per cent this upcoming year. While relatively strong, that was less than what analysts had been forecasting.
Another source of potential disappointment for Wall Street is what the Federal Reserve does with interest rates. The expectation had been that the Fed would keep cutting interest rates in hopes of shoring up the slowing job market. Wall Street loves lower rates because they can give a boost to the economy and to prices for investments.
But questions are rising about whether a third cut for the year will come out of the Fed’s next meeting in December, something that traders had earlier seen as very likely. The downside of lower interest rates is that they can make inflation worse, and inflation has stubbornly remained above the Fed’s 2 per cent target.
Fed officials have also pointed to the US government’s shutdown, which delayed the release of updates on the job market and other signals about the economy. With less information and less certainty about how things are going, some Fed officials have suggested it may be better just to wait in December to get more clarity.
Now that the shutdown is over, the government is preparing to release September’s delayed jobs report on Thursday. That could create further swings for the market. Data that’s very strong would likely stay the Fed’s hand on rate cuts, while figures that are very weak would raise worries about the economy.
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In 2026, the Fed is likely to cut interest rates only in response to a slowing economy instead of trying to cut ahead of it, according to Barry Bannister, chief equity strategist at Stifel. That’s not as good an environment for stock prices, and Bannister said the “Fed’s ‘free lunch’ is over.”
In the bond market, the yield on the 10-year Treasury eased to 4.12 per cent from 4.14 per cent late Friday.
In stock markets abroad, indexes fell modestly across much of Europe and Asia.
Tokyo’s Nikkei 225 slipped 0.1 per cent after the government reported that the Japanese economy contracted at a 1.8 per cent annual pace in the July-September quarter.
