4:05pm: Wall Street closes on firmer footing
US stocks were higher on Monday at the close, heading into a week where the focus will be on inflation, interest rates, and the start of the second quarter earnings season.
At 4pm, the Dow had gained 0.6% to close at 33,944 points, the S&P 500 had added 0.2% to reach 4,410 and the Nasdaq finished in the green at 13,685 for a 0.2% increase on the day.
"There’s been a slightly more measured start to trading this week after the volatility of the last few days settles down and yields slip back from their recent highs," CMC Markets analyst Michael Hewson noted.
US banks are also in focus this week as we get set for the latest 2Q numbers from the likes of JPMorgan Chase, Citigroup and Wells Fargo on Friday.
"Comments from Fed governor Michael Barr, who is chair for banking supervision, that the big banks may need higher capital requirements in the coming years doesn’t appear to impact on share prices now," according to Hewson.
12:05pm: Stocks struggle following last week’s slide
US stocks were mixed in noon trading ahead of Wednesday’s consumer price index (CPI) report as well as producer price index (PPI) data due out Thursday.
At midday, the Dow gained 131 points to 33,866, while the S&P 500 eased a single point at 4,398 and the tech-heavy Nasdaq slipped 46 points to 13,615.
“After a mixed start to July, investors are certainly hoping for some better news, but as Friday’s payroll data shows a recession is still some way off, and as a result more rate hikes are still coming down the line,” IG chief market analyst Chris Beauchamp said.
Notable movers included shares of Icahn Enterprises LP, which surged 19% following a Wall Street Journal report that Carl Icahn untied his personal loans from the stock price in response to recent attacks by a short seller.
9:40am: Fed speakers eyed
US stocks opened modestly higher on Monday with traders putting off any big moves ahead of inflation reports and the kickoff of earnings season by the big banks later this week.
Just after the market opened, the Dow Jones had added 55 points or 0.2% at 33,790 points, the S&P 500 was up 4 points or 0.1% at 4,403 points, and the Nasdaq was up 9 points or 0.1% at 13,667 points.
“US stocks are set to kick the week off broadly higher in quiet trade, with US inflation data and earnings season in focus,” noted FOREX.com market analyst Fiona Cincotta.
“Attention now turns to Federal Reserve speakers, including Loretta Mester, Raphael Bostic, and Mary Daly. Investors will be keen to hear any reflections on the US jobs report, expectations for inflation, and the future path for interest rates.”
7:45am: Mixed start expected
US stocks are expected to start mixed on Monday after falls on Friday following the below-forecast US June jobs report as investors refocus on a batch of inflation data due on Wednesday and Thursday and brace for the start of the second-quarter corporate earnings season.
In pre-market trading, futures for the Dow Jones Industrial Average (DJIA) were up 0.1%, while those for the S&P 500 fell 0.1%, and contracts for the Nasdaq 100 futures lost 0.2%.
All three major indexes posted losses on Friday, the DJIA losing 187 points, or 0.6%, at 33,734, while the S&P 500 index shed 0.3%, and the Nasdaq Composite eased back 0.1%. Last week overall, the DJIA fell 0.9%, the S&P 500 lost 1.2%, and the Nasdaq Composite dropped 2%.
Despite June non-farm payrolls (NFP) showing growth cooling somewhat, the economic picture still looks bad enough for the Federal Reserve to resume interest rate hikes later this month to tame stubborn inflation after June's pause.
The latest US consumer price index inflation report is due out on Wednesday morning, followed by the wholesale inflation producer price index on Thursday.
Naeem Aslam, chief investment officer at Zaye Capital Markets commented: "On Friday, the US NFP data brought less good news than many anticipated, and it was pretty clear that the US ADP continues to provide no indication about the US NFP number. But what traders are paying attention to today is that it was the first time in a long time that the US NFP number actually missed the forecast, and the unemployment rate also ticked higher.
"So all that lag in the data that everyone has been focused on has started to show up, which means that there is weakness in the US labour market data. Nonetheless, the actual number wasn’t weak or strong enough to change the actual monetary path for the Fed, which means that traders are still apprehensive about more interest rate hikes."
He added: "The US CPI reading, which is still running twice as hot as the Fed’s target, will be the main focus among traders and investors this week, and it is possible that this week we will see the reading dropping under 4%, and we believe that market players will actually cheer that number. The fact is that anything that makes the reading fall in the three-handle and makes inflation come closer to the Fed target is really good news."
Investors also have a slew of quarterly earnings reports to consider, with financial giants BlackRock, JPMorgan Chase, Wells Fargo and Citi all kicking off the US second-quarter earnings season this week.