(CTN News) – On Monday, the Wall S&P 500 and Nasdaq climbed as investors shrugged off geopolitical risks and assessed U.S. monetary policy outlook.
Stocks recovered on Monday after a subdued start, with energy stocks jumping 1.3% after an aborted revolt by Russian mercenaries over the weekend, which the market did not view as an immediate threat.
The Associated Press reports:
There may be a quiet week on Wall Street
First day of trading after a six-week rally for Wall Street hit a roadblock.
S&P 500 rose 0.2% in morning trading. Its peak was reached a few weeks ago. There was a decline of 11 points, or less than 0.1%, on the Dow Jones Industrial Average at 10:20 EDT, whereas the Nasdaq composite was 0.4% higher.
In a deal with Aston Martin, Lucid Group will provide powertrains and batteries. In its hunt for the next weak link in the system, Wall Street punished PacWest Bancorp after it sold a portfolio of loans.
Carnival fell 8.5% despite better-than-expected results and revenue. Earnings per share, occupancy levels and other measures forecast in the current quarter disappointed some investors.
Investors remain uncertain whether the economy can survive a painful recession after central banks around the world raised interest rates at a blistering pace to control inflation. Trading was mostly quiet in financial markets around the world.
Over the weekend, Russia was the scene of an armed rebellion. Investors mostly ignored the brief mutiny by mercenary soldiers during the war in Ukraine.
Oil prices held steady, unlike in the early days of the Ukraine war when they soared. Crude prices rose 0.4% to $69.47. Brent crude rose 0.4% to $74.31.
This week’s economic and earnings reports won’t help answer Wall investors’ main question. The Federal Reserve will release a report on Friday showing how inflation behaved in May, but consumer and wholesale price data have already been released.
We’ll pay more attention to June’s inflation data. Next Friday will bring the next monthly jobs report.
According to CME Group data, traders expect the Fed to raise rates by a quarter of a percentage point at its next meeting, July 25-26. Since early last year, the Fed has hiked its key overnight interest rate at an accelerated pace. In addition, Wall Street expects the next hike to be the last.
Inflation remains stubbornly high even after it has fallen from its peak last summer, according to the Fed. It’s a small difference, but each successive hike could hurt the economy more.
A high rate undermines inflation by applying the brakes to the entire economy, and a high rate raises the risk of a recession.
Several U.S. banks have already failed due to high rates. Manufacturers have also been contracting for months, and analysts say they don’t know what could break next in the economy.
Inflation is on the rise and interest rates are on the rise, says Clifford Bennett, chief economist at ACY Securities. The stock market is not bullish.”
Despite the S&P 500’s 20% climb since mid-October. According to one definition, Wall Street is in a “bull market,” a long-term upward run for stocks.
S&P 500 lost ground last week after Fed Chair Jerome Powell reiterated that inflation still needs to be tackled, and several central banks raised rates.
A remarkably solid job market has also allowed the economy to avoid a recession so far, which has led critics to suggest the stock market was due for a break.
Bond yields fell from 3.74% late Friday to 3.72% on Monday. Among other things, it sets mortgage rates.
At 4.75%, the 2-year yield remained steady in response to Fed expectations.
In Europe, indexes were mixed. Shanghai stocks fell 1.5%, but Asian indexes moved modestly.