S&P 500, Nasdaq 100 Ease As Traders Await CPI Report: What's Driving Markets Monday

The stock market experienced a negative start to the week, with investors remaining fairly cautious ahead of Wednesday’s inflation report.

Large tech stocks traded in the red, likely hit by weaker-than-expected inflation data in China overnight, with Amazon.com, Inc. AMZN falling 2.3% ahead of its Prime Day (July 11. Microsoft Corp. MSFT and Alphabet Inc. GOOG GOOGL saw similar losses for the session.

Small caps outperformed large caps, while industrial and energy led gains among sectors. Big bank earnings kickstart by the end of the week, while earnings from other notable names such as PepsiCo. PEP are also worth watching.

Cues From Past Monday's Trading:

The S&P 500 started the week on a weaker note, slipping 0.2%. The tech-heavy Nasdaq 100 fell 0.7%, while blue-chip stocks in the Dow Jones Industrial Average ticked 0.3% up.

Small caps emerged as the outlier, with the Russell 2000 gaining 1.3% on the day.

US Index Performance On Monday

Monday’s Trading In Major US Equity ETFs

In midday trading on Monday, the SPDR S&P 500 ETF Trust SPY was 0.2% lower to $437.71, the SPDR Dow Jones Industrial Average ETF DIA rose 0.3% to $338.45 and the Invesco QQQ Trust QQQ was 0.7% lower to $363.75, according to Benzinga Pro data.

Equity sectors saw mixed performances. The Industrials Select Sector SPDR Fund XLI and the Energy Select Sector SPDR Fund XLE rose 1% and 0.7% respectively, marking the top performers for the day.

The Communication Services Select Sector SPDR Fund XLC was the laggard, down 0.8%, followed by the Technology Select Sector SPDR Fund XLK, down 0.6%.

Latest Economic Data

The Commerce Department released the wholesale inventories report for May, showing a flat reading for the month, improving from a 0.3% drop in April, a slightly better than the expected 0.1% dip.

Fed Vice Chair for Supervision Michael Barr called for the largest banks to hold an additional 2 percentage points of capital, equivalent to an extra $2 for every $100 of risk-weighted assets in order to strengthen the resiliency of the system.

San Francisco Fed President Mary Daly stated the Fed is nearing the end of its rate-hiking cycle and that a couple more rate rises are likely this year.

Cleveland Fed President and FOMC member Loretta Mester delivered hawkish remarks stating she favored a June rate hike and that she believes rates are not restrictive enough.

Atlanta Fed President and FOMC member Raphael Bostic is due to speak at 12 p.m. EDT.

The Fed will release its report on outstanding consumer credit for May at 3 p.m. EDT. The measure is expected to decline from $23.01 billion in April to $20.50 billion in May.

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Stocks In Focus

• FMC Corp. FMC fell over 11%, on track for the worst session since March 2020, after the company warned that its customers began to abruptly reduce inventory a couple months ago.
• Paypal Holdings, Inc. PYPL rose 3.2%, marking the best performance among S&P 100’s companies.
• MercadoLibre Inc. MELI plunged 7%, after Bank of America Securities downgraded the e-commerce company from buy to neutral and cut the price target to $1,350 from $1,680.

Commodities, Bonds, Other Global Equity Markets

Crude oil held steady, with a barrel of WTI-grade crude trading at $73.5. The United States Oil Fund ETF USO was flat at $65.9.  

Treasury yields fell, with the 10-year yield down by 6 basis points to 4.01% and the two-year yield down by 8 basis points to 4.87%. The iShares 20+ Year Treasury Bond ETF TLT was 0.1% hith34 for the day. 

The dollar fell, with the U.S. dollar index, which is tracked by the Invesco DB USD Index Bullish Fund ETF UUP, down 0.2%. The EUR/USD pair, which is tracked by the Invesco CurrecyShares Euro Currency Trust FXE, was 0.2% higher to 1.0986.

European equity indexes closed in the green. The SPDR DJ Euro STOXX 50 Etf  FEZ rose 0.6%. 

Gold held unchanged at $1,923/oz. The SPDR Gold Trust GLD was flat at $178.5. Silver was also flat at $23.5, with the iShares Silver Trust SLV unchanged at 23. Bitcoin BTC/USD was 0.3% higher to $30,280.

Staff writer Piero Cingari updated this report midday Monday.