Following last week's losses, US markets ended higher on Monday, as comments from Federal Reserve officials strengthened the idea that the US central bank is nearing the conclusion of its tightening cycle. The S&P 500 added to its tiny gains at the close, with investors being cautious ahead of Wednesday's consumer price index and the …
Following last week’s losses, US markets ended higher on Monday, as comments from Federal Reserve officials strengthened the idea that the US central bank is nearing the conclusion of its tightening cycle.
The S&P 500 added to its tiny gains at the close, with investors being cautious ahead of Wednesday’s consumer price index and the start of second-quarter earnings later this week.
Investors are watching to see if price pressures continue to ease. This could provide insight into the interest rate outlook, as many traders expect the Fed to boost rates by 25 basis points this month.
Several Fed officials indicated on Monday that more interest rate hikes are needed to drive down inflation, which is currently too high, but that the end of the US central bank’s current monetary policy tightening cycle is near.
“The market is obviously poised for the start of earnings season,” said Quincy Krosby, chief global strategist at LPL Financial in Charlotte, North Carolina. “However, investors are also hyper-focused on consumer prices and a heavy roster of Fed speakers this week.”
“What the market is concerned about,” she noted, is the forecast for interest rates.
Earnings for S&P 500 companies are expected to begin unofficially this week with results from the major US banks. Earnings are expected to dip 6.4% year on year in the second quarter, according to Refinitiv IBES data.
Shares of Intel (INTC) jumped 2.8% on the day, while the semiconductor index (SOX) gained 2.1%.
The Dow Jones Industrial Average (DJI) increased by 209.52 points, or 0.62%, to 33,944.4, the S&P 500 (SPX) increased by 10.58 points, or 0.24%, to 4,409.53, and the Nasdaq Composite (IXIC) increased by 24.77 points, or 0.18%, to 13,685.48.
Icahn Enterprises (IEP) rose 20.2% after the investment firm announced that Carl Icahn and banks had signed modified loan agreements that untied the activist investor’s personal loans from the firm’s market price.
Citigroup strategists downgraded U.S. equities to “neutral” on Monday, saying megacap growth is poised to slow and U.S. recession concerns remain.
Volume on US markets was 10.20 billion shares, compared to an 11.09 billion average for the entire session for the previous 20 trading days.
On the NYSE, advancers outnumbered decliners by a 2.23-to-1 ratio; on the Nasdaq, advancers outpaced decliners by a 2.06-to-1 ratio.
The S&P 500 established 28 new 52-week highs and four new lows, while the Nasdaq Composite established 59 new highs and 47 new lows.
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