4:13pm: Benchmarks end losing streaks
The Dow closed Monday up 408 points, 1.2%, at 35,473, the Nasdaq Composite added 85 points, 0.6%, to 13,994 and the S&P 500 improved 40 points, 0.9%, to 4,518. The small-cap Russell 2000 index gained 1 point to 1,959.
The S&P 500 and Nasdaq Composite each snapped four-session losing streaks.
“Markets are back on to a risk-on mode,” said Chris Zaccarelli, chief investment officer of the Independent Advisor Alliance. “It’s been a better-than-expected earnings season, and so I think that’s why the market’s had such staying power.”
2:15pm: Nasdaq back in the black
Wall Street looked set to end Monday higher after last week's losses, triggered in part by Fitch's downgrade of the US government's triple AAA rating.
The tech-heavy Nasdaq turned around in afternoon trade to trade firmer despite a 1.8% decline in Apple Inc (NASDAQ:AAPL)'s share price.
The Dow Jones Industrial Average was 1.2% higher at 35,470 by mid-afternoon in New York, the S&P 500 was 0.7% to the good and the Nasdaq had recovered to trade 0.3% up at 13,954.
11:45am: Dow makes more gains
Blue-chip shares made further gains approaching midday in New York as investors prepare for inflation data later this week that will be key to the Federal Reserve's next rates decision.
However, as the second-quarter earnings season progresses, the tech-heavy Nasdaq has headed into the red, with Apple Inc (NASDAQ:AAPL)'s shares continuing their decline after releasing earnings last week.
Shortly before midday in New York, the Dow Jones Industrial Average was 0.9% higher at 35,383 and the S&P 500 was 0.5% firmer at 4,500. But the Nasdaq Composite retreated 0.2% to 13,887.
9:37am: Wall Street bounces on hopes of economic soft landing
US markets made a bright start to trading on Monday on hopes of an economic soft landing despite a leading Federal Reserve official hinting further interest rate rises may be on the way.
Shortly after the opening bell Dow Jones Industrial Average was up 196.80, 0.6%, at 35,262.42, the S&P 500 was up 24.54 points, 0.6%, at 4,502.57 and Nasdaq Composite was up 52.34 points, 0.4%, at 13,961.58.
On Friday, JPMorgan's chief economist said the bank is no longer forecasting a US recession this year and raised its economic growth estimate as the economy expands at a "healthy pace."
The firm increased its current-quarter real annualized GDP growth estimate to 2.5% from 0.5%.
"Given this growth, we doubt the economy will quickly lose enough momentum to slip into a mild contraction as early as next quarter, as we had previously projected," the economist wrote.
The Campbell Soup Company has announced its acquisition of Sovos Brands, the parent company of Michael Angelo's and Rao's foods, soups and sauces lines, in a cash deal of $2.33 billion.
This acquisition, priced at $23 per Sovos share, represents a 28% premium on Sovos' recent closing price.
Following the announcement, Sovos' stock surged by 24.7% in early trading, while Campbell's shares dipped 2.1%.
But Tyson Foods shares tumbled 9.8% to $51.50 after it reported third-quarter revenue and earnings that fell short of expectations due to slowing demand for its beef products and weaker pricing for pork and chicken.
The Warner Bros. Discovery shares climbed 0.9% on reports its smash hit “Barbie” was set to top $1 billion at the global box office, according to studio estimates. Totals will come out today.
Director Greta Gerwig will become the second woman to direct a live-action billion-dollar blockbuster, joining “Captain Marvel” co-director Anna Boden.
7:55am: Nasdaq called higher but Fed official sees more rate rises
US stocks are expected to start the week on the front foot ahead of a week which sees inflation figures for July released.
In pre-market trading, futures for the Dow Jones Industrial Average were 0.1% higher, while those for the S&P 500 rose 0.2%, and contracts for the Nasdaq 100 futures were up 0.4%.
The future path of interest rates will once again be at the forefront of investor’s minds ahead of the CPI print on Thursday and after a leading Federal Reserve official suggested there may be more hikes to come.
"Officials at the Federal Reserve are suggesting they are not yet done in their battle with rising prices. Having been slow to respond to what they believed was transient inflation in 2021, it seems central banks like the Fed are in no mood to be complacent," said AJ Bell investment director Russ Mould.
Federal Reserve Governor Michelle Bowman will tell a “Fed Listens” event in Atlanta today that more interest rate hikes "will likely be needed" to bring inflation down further.
In remarks pre-released on Saturday, Bowman said she supported the policy-setting Federal Open Market Committee's decision for a rate hike in July given "strong economic data and still elevated inflation."
"I also expect that additional rate increases will likely be needed to get inflation on a path down to the FOMC's two percent target," she added in her remarks.
Her remarks came after a mixed employment report on Friday showing that hiring in the US has slowed but wage gains remained robust.
Joshua Mahony at Scope Markets pointed out markets “are pricing a 40% chance of another 2023 hike, with the latest US CPI figure key to determining whether that will become a more prominent or marginal view at the Fed.”
The data dependent Fed will now be eyeing Thursday’s inflation report although headline inflation is expected to tick higher after June’s data came in below forecast.
The consumer price index rose 3.0% on an annual basis in June, cooling from a 4.0% rise in May. It was the smallest 12-month increase since March 2021. Core inflation - which excludes items such as food and energy - was 4.8% in June, down from 5.3% in May.
According to FXStreet consensus, markets are expecting a 3.3% annual rise in CPI in July. Core inflation, however, is meant to cool slightly to a 4.7% rise.
The earnings season dials down after a frantic two weeks but numbers will be released from Eli Lilly, Walt Disney, and Alibaba later this week.