- Last week, the S&P 500 and Dow hit record highs, boosted by a softer-than-expected July jobs report.
- On Friday, data showed the U.S. economy unexpectedly shed jobs, tempering rate-hike bets.
- On Monday, Wall Street's main indexes inched lower as investors weighed Middle East developments and awaited inflation data.
- S&P 500 futures were little changed, with the Nasdaq and Dow slightly lower.
- Oil prices rose on doubts about a U.S.-Iran deal to reopen the Strait of Hormuz.
- Consumer and producer inflation readings due later this week could offer key clues on the Federal Reserve's monetary policy path.
- Rate-hike bets were tempered on Friday after data showed the U.S. economy unexpectedly shed jobs in July.
- In the market, six of the 11 S&P 500 sectors were lower, with real estate and consumer staples stocks the biggest weights.
S&P 500 futures opened the week little changed as traders kept a close eye on the Strait of Hormuz negotiations and awaited crucial inflation data. The index traded around the flatline, with the Dow Jones down 61 points, or 0.1%, and the Nasdaq Composite declining 0.1%.145
Oil prices surged by 2%, with U.S. crude rising to $80.03 per barrel, amid skepticism about a potential deal between the U.S. and Iran to enhance shipping traffic through the strategic waterway. Iran's Foreign Minister, Abbas Araghchi, stated there was “no possibility of restarting negotiations” unless the U.S. addresses its previous violations of agreements.
The market's cautious stance is influenced by upcoming consumer and producer inflation readings, which could provide insights into the Federal Reserve's monetary policy. Fed Chair Kevin Warsh's comments suggest a focus on maintaining low interest rates, with traders currently pricing in a 44% chance of a rate hike in September, down from 67% a week prior.6
Despite the overall market's mixed performance, the S&P 500 energy index rose 2.6%, reflecting the uptick in oil prices. Meanwhile, six of the eleven S&P 500 sectors declined, with technology stocks like Apple and Intel facing significant losses due to downgrades and stock offerings, respectively.
As traders navigate these developments, the focus remains on how inflation data will shape future market movements and central bank policies.
“Traders now price in a 44% chance of a September rate hike, down from 67% a week ago, after July payrolls unexpectedly fell. Apple dropped 2.4% on a Jefferies downgrade, while Intel fell 4.8% after a $15 billion stock offering.”
CNBC
