- US stocks closed mixed to start the week.
- Traders struggled to extend a comeback rally after erasing most losses from last week's big rout.
- New inflation data will arrive on Tuesday with the producer price index report for July.
US stocks wavered on Monday, struggling to keep the rally that materialized at the end of last week going ahead of new inflation data for July.
Stocks seesawed between gains and losses throughout the session, unable to decisively erase the losses from last Monday's sell-off, which was the worst in two years.
On Tuesday, investors will digest the first of two inflation data points due out this week. The producer price index, a measure of wholesale inflation, is expected to be in-line with the June data at 0.2%.
The second update will be the main event, with the consumer price index set to show the rise in inflation faced by the average consumer last month. Economists expect the reading to show a slight rise on a monthly basis, though not enough to scramble predictions for the Fed to begin cutting interest rates at its policy meeting next month.
Yet, rate cuts are a double-edged sword. Markets are clamoring for lower interest rates, but a move by the Fed would also be an acknowledgement that the economy is slowing. Fears of a recession are what sparked the latest big sell-off and any weakness in the economic picture could be the catalyst for the next big move down in stock prices.
"The bears are thinking that an aggressive Fed-cutting schedule is a recession warning, not an all-clear reflection that inflation has been tamed," veteran investor Louis Nevallier wrote in a note on Monday.
Here's where US indexes stood at the 4:00 p.m. closing bell on Monday:
- S&P 500: 5,344.39, up 0.01%
- Dow Jones Industrial Average: 39,357.01, down 0.4% (141 points)
- Nasdaq composite: 16,780.61, up 0.2%
Geopolitical tensions also flared anew to start the week, with the Pentagon sending more US forces to the Middle East ahead of a potential attack by Iran. The US has been anticipating an attack on Israel following the assassination of a Hamas leader in Tehran. US crude prices surged as much as 4% Monday.
Here's what else is going on today:
- Morgan Stanley added three names to its "buy" list as markets are expected to stay choppy.
- There's a 40% chance the US economy is already in a recession based on a new indicator that builds on the highly accurate Sahm Rule.
- Russia is reportedly receiving shipments of billions of dollars and euros despite sanctions and de-dollarization talk.
In commodities, bonds, and crypto:
- Oil futures were up. West Texas Intermediate crude oil rose 3.8% to $79.80 a barrel. Brent crude, the international benchmark, increased 3% to $82.06 a barrel.
- Gold rose 1.5% to $2,510 per ounce.
- The 10-year Treasury yield dipped up three basis points to 3.909%.
- Bitcoin dipped 1% to $59,254.