Wall Street’s main indexes were mixed on Monday as investors treaded cautiously ahead of a widely expected Federal Reserve rate cut later this week in a meeting that is shaping up to be one of the most divisive in years.

Delayed data last week showed that consumer spending increased moderately toward the end of the third quarter, giving investors greater confidence that the Fed will focus on lowering borrowing costs on Wednesday to help shore up the labor market.

Inflation has so far proved sticky, making most policymakers cautious about lowering borrowing costs, although a few influential Fed policymakers have adopted a more dovish stance in recent weeks.

“The vote is likely to be a three-way split, with Governor (Stephen) Miran preferring a larger 50-basis-point move, and at least three policymakers preferring to stand pat,” said Michael Brown, a senior research strategist at Pepperstone.

“Should four or more officials break ranks, it would mark the largest split since 1992,” said a group of analysts at Deutsche Bank.

Traders are now pricing in an 89.6% chance of a 25-basis-point rate cut on Wednesday, up from as low as 30% in November, according to the CME’s FedWatch Tool.

They will also closely scrutinize Chair Jerome Powell’s comments that day to gauge the central bank’s future policy path.

Warner Bros Discovery jumped 7.2% after Paramount Skydance launched a hostile bid worth $108.4 billion for the iconic Hollywood studio that owns rights to characters such as Bugs Bunny and Superman, in a last-ditch effort to outbid Netflix.

Paramount’s shares were up 1.6%, while Netflix’s fell 2.8%.

You have cash-rich companies like Paramount and Netflix, so a bidding war is possible, but in the end whoever secures those assets should boost that company’s shareholder value, as long as they do not overpay, said Adam Sarhan, chief executive officer of 50 Park Investments.

Main Markets Mixed

At 9:44 a.m. ET, the Dow Jones Industrial Average fell 123.66 points, or 0.26%, to 47,831.33, the S&P 500 gained 0.37 points, or 0.01%, to 6,870.97 and the Nasdaq Composite gained 74.13 points, or 0.31%, to 23,652.25.

Meanwhile, White House Economic Adviser and top contender for the Fed Chair role next year Kevin Hassett said in an interview that the Fed should continue to lower interest rates.

A near 3% gain in Broadcom lifted the information technology sector, the sole one of the 11 S&P 500 sectors in the green. A report said Microsoft is in talks with the company about developing custom chips.

Concerns that companies are relying on debt to fund costly artificial intelligence ambitions, while also pursuing complex deals across the sector, have triggered tech-led sell-offs several times this year. Oracle added 2.4%.

Marvell Technology fell 8.2% after S&P Dow Jones Indices did not add the chipmaker to the S&P 500.

Confluent <CFLT.O> gained 28.5% after IBM <IBM.N> said it will acquire the data-infrastructure company for about $11 billion. Shares of Big Blue gained 1.6%.

Tesla stock fell 1.9% after brokerage Morgan Stanley downgraded the electric-vehicle maker to equal-weight from overweight.

Carvana <CVNA.N> jumped 7.2% after S&P Dow Jones Indices announced that the online used-car dealer secured a spot in the benchmark S&P 500 index.

Declining issues outnumbered advancers by a 1.32-to-1 ratio on the NYSE, while advancing issues outnumbered decliners by a 1.25-to-1 ratio on the Nasdaq. The S&P 500 posted 14 new 52-week highs and eight new lows, while the Nasdaq Composite recorded 85 new highs and 25 new lows.

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(Reporting by Johann M Cherian and Pranav Kashyap in Bengaluru; Editing by Tasim Zahid)