In a day of mixed trading, US stocks showed a lack of clear direction on Monday as investors braced themselves for a crucial week highlighted by the Federal Reserve's potential interest rate cut, the first in four years. The Dow Jones Industrial Average experienced a modest gain of 0.5% after reaching an all-time high earlier in the day, while the S&P 500 slightly increased and the Nasdaq Composite saw a decline of 0.7%. Last week, the major indexes rallied, fueled by optimism about an expected rate cut and strong performance in the technology sector, which led to the S&P 500 and Nasdaq posting their largest weekly gains of the year.

Tech stocks took a mixed stance on Monday, with industry favorites like Nvidia, Apple, and Broadcom all falling more than 2%. On the other hand, Amazon and Microsoft saw less than 1% decline, while Meta Platforms and Alphabet experienced slight gains. The VanEck Semiconductor ETF showed a decline of 1.3% during Monday's trading. However, Intel emerged as the standout performer, surging over 6% following the news that the chipmaker had secured a multibillion-dollar contract from the Pentagon. Despite this positive development, Intel's stock remains down approximately 60% since the beginning of the year.

Market participants are eagerly awaiting the Fed's meeting on Wednesday to learn not if, but how aggressively, the central bank will cut interest rates. While Fed officials have acknowledged the need for rate cuts due to easing inflation and a weakened labor market, they have refrained from commenting on the specific magnitude or pace of the easing. Traders are currently pricing in a 60% chance of a half-percentage-point reduction in the influential fed funds rate, according to the CME Group's FedWatch tool, up from 50% on Friday and 30% a week ago. However, it's worth noting that the Fed typically adjusts rates by a quarter point at a time, and any deviation from this norm could suggest a more significant economic deterioration.

Amidst these uncertainties, the yield on 10-year Treasurys, which is sensitive to interest rate expectations, fell to its lowest level in over a year, standing at 3.62% compared to 3.65% on Friday. Meanwhile, gold futures remained relatively stable near record highs at around $2,610 per ounce, while bitcoin experienced a 2% decline to approximately $58,000.

In other market news, Micron Technology, a major memory chip manufacturer, saw its stock decline by 4.5% following Morgan Stanley's downbeat assessment of the industry and a reduction of Micron's price target to $100 from $140. The bank noted that while memory chip demand continues to rise, the rate of growth is slowing down as supply starts to catch up.

On a more positive note, real estate platform Zillow Group experienced a 5% increase in its share price after being upgraded by Wedbush analysts, who highlighted its potential to capitalize on lower mortgage rates in the US. Since reporting better-than-expected second-quarter results and appointing a new CEO in August, Zillow's shares have surged by approximately 50%.

Intel's encouraging news continued as the semiconductor giant's shares rose by 4% due to reports of a multibillion-dollar award from the Pentagon. Intel reportedly qualified for $3.5 billion in federal grants under the Secure Enclave program, aimed at producing advanced chips for military and intelligence applications. This announcement comes in addition to the $8.5 billion in grants and $11 billion in loans awarded to Intel earlier this year to revitalize US semiconductor manufacturing.

Contacted lens producer Bausch + Lomb experienced a significant surge in share price of nearly 14% after reports emerged that the company is considering a sale. Working alongside Goldman Sachs, the eyecare company is seeking to separate itself from its heavily indebted parent company, Bausch Health Cos. This move comes after Bausch + Lomb's spin-off from Bausch Health in 2022.

Lastly, aluminum giant Alcoa witnessed a 7% increase in its stock price as it announced the sale of its 25.1% stake in a joint venture with Saudi Arabia Mining Co. for approximately $1.1 billion in stock and cash. The three-year minimum holding requirement for the shares ensures a certain level of stability for Alcoa.

As Warren Buffett's Berkshire Hathaway retraced from its record high, the stock's decline in recent weeks has seen a decrease in trading volumes, indicating a slowdown in selling momentum. Investors are advised to monitor key support levels for Berkshire Hathaway Class B shares at $446, $421, and $398, while keeping an eye on the $480 area if the stock resumes its longer-term upward trajectory.

With the market eagerly awaiting the Federal Reserve's rate cut decision and closely tracking various company developments, the week ahead is poised to be crucial for financial markets. Investors will be carefully monitoring the central bank's decision-making and assessing the implications for various sectors and individual stocks.