Stocks falter amid busy week of inflation data

U.S. stocks gave up gains to trade roughly flat on Monday as investors neared the home stretch of earnings season and braced for a week loaded with inflation data.

The S&P 500 tipped into negative territory after the benchmark index posted three consecutive weeks of gains on Friday. The Dow Jones Industrial Average rose just 40 points, or about 0.1%, and the tech-heavy Nasdaq Composite was close to balance after rising 1% earlier in the session.

Meme shares surged on Monday despite no news to lift the stock. Bed, Bath & Beyond (BBBY) climbed as much as 50%, while GameStop (GME) and AMC (AMCr) each rose around 12% and 17%, respectively. The moves came amid renewed attention to names on Reddit’s Wallstreetbets message board.

Elsewhere in the markets, shares of Nividia (NVDA) fell nearly 7% after the company said second-quarter revenue would drop 19% from the previous quarter. The warning comes as the gaming industry more broadly sees consumers buying fewer discretionary items such as laptops and video game consoles.

Stocks ended Friday’s session on a lackluster 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, reigniting concerns that the Federal Reserve may proceed 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 as strong data means the Fed has more work to do.” , said Bank of America economists led by Michael. Gapen said in a note Friday.

The bank also revised up its projections for rate hikes by another 25 basis points, forecasting hikes of 50 basis points in September and November and 25 basis points in December.

NEW YORK, NEW YORK – JULY 25: People walk outside the New York Stock Exchange (NYSE) on July 25, 2022 in New York City. Shares edged higher in morning trade as investors weigh in on the Federal Reserve’s upcoming meeting this coming Wednesday. (Photo by Spencer Platt/Getty Images)

Investors are expected for three major inflation readings this week: the all-important consumer price index (CPI), producer price index (PPI) and unit labor costs, a measurement of all wages paid to employees.

The closely watched CPI index for July, due Wednesday, is expected to show a slight moderation from last month’s reading, mainly helped by lower gasoline prices. The figure, however, is still expected to show inflation climbing at the fastest pace in four decades.

Economists polled by Bloomberg predict that the broadest measure of the CPI rose 8.7% in July, a figure that would mark a slight slowdown from 9.1% in June. During the month, the CPI should post an increase of 0.2%, against 1.3% last month.

Earnings season is winding down, with about 87% of S&P 500 companies reporting actual second-quarter earnings year-to-date. But other major reports are still set for release, with earnings from names like Disney, (DIS), Coinbase (COIN), Tyson Foods (TSN), and Rivian Automotive (RIVN) on tap this week.

Alexandra Semenova is a reporter for Yahoo Finance. Follow her on Twitter @alexandraandnyc

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