U.S. stocks gave up gains to trade mostly flat on Monday as investors approached the final stretch of the earnings season and braced for a busy week of inflation data.
The S&P 500 teetered in negative territory after the benchmark index posted three straight weeks of gains on Friday. The Dow Jones Industrial Average was up just 40 points, or roughly 0.1 percent, and the tech-heavy Nasdaq Composite was close to a breakout after rising as much as 1 percent earlier in the session.
Shares of Meme jumped on Monday despite no news to lift the stock. Bed, Bath & Beyond ( BBBY ) jumped as much as 50%, while GameStop ( GME ) and AMC ( AMCr ) were up about 12% and 17%, respectively. The moves came amid renewed attention to the names on Reddit’s Wallstreetbets message board.
Elsewhere, shares of Nvidia ( NVDA ) fell nearly 7% after the company said its second-quarter revenue would fall 19% from the previous quarter. The warning comes as the gaming business as a whole sees consumers buying fewer discretionary items such as laptops and video game consoles.
Stocks finished mixed in Friday’s session after a jobs report showed the U.S. economy added twice as many jobs in July as expected. The Labor Department reported that nonfarm payrolls rose by 528,000 last month, renewing concerns that the Federal Reserve may push ahead with aggressive interest rate hikes to slow demand and lower inflation.
“This likely signals a reduced risk of a near-term recession, but in our view increases the risk of a hard landing over time, given that the strong data means the Fed has more work to do,” Bank of America economists led by Michael Gapen said in a note on Friday.
The bank also revised upward its forecast for interest rate hikes by an additional 25 basis points, calling for a 50 basis point increase in September and November and 25 basis points in December.
NEW YORK, NEW YORK – JULY 25: People walk in front of the New York Stock Exchange (NYSE) on July 25, 2022 in New York City. Stocks rose slightly in morning trading as investors weighed the upcoming Federal Reserve meeting this Wednesday. (Photo by Spencer Platt/Getty Images)
This week, investors are looking to three major inflation indicators: the all-important consumer price index (CPI), the producer price index (PPI) and unit labor costs, a measure of all wages paid to employees.
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The closely watched CPI index for July, due out on Wednesday, is expected to show a slight slowdown from last month’s reading, helped mainly by lower gasoline prices. However, the figure is still expected to show inflation rising at its fastest pace in four decades.
Economists polled by Bloomberg forecast that the broadest measure of CPI rose 8.7 percent in July, a number that would mark a slight slowdown from June’s 9.1 percent. During the month, the CPI is expected to show an increase of 0.2% from 1.3% last month.
Earnings season is coming to an end, with roughly 87% of companies in the S&P 500 reporting actual results for the second quarter year-to-date. But more big reports are still set to roll, with gains from names including Disney ( DIS ), Coinbase ( COIN ), Tyson Foods ( TSN ) and Rivian Automotive ( RIVN ) this week.
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Alexandra Semenova is a reporter for Yahoo Finance. Follow her on Twitter @alexandraandnyc
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