Traders work on the floor of the New York Stock Exchange.
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- The S&P 500 dropped for a 5th straight session on Monday but closed well above session lows.
- The Nasdaq Composite reversed sharply to finish higher, ending a streak of four straight losses.
- The 10-year Treasury yield reached 1.8% for the first time since the declaration of the COVID pandemic.
US stocks finished mixed Monday as the S&P 500 extended a string of losses while the Nasdaq Composite staged a sharp reversal to close with a slight gain.
Ahead of inflation data this week that could underscore concerns the Federal Reserve will move aggressively to fight hot inflation, the 10-year Treasury yield during the session surpassed 1.8% for the first time since January 2020. That sliced into highly-valued tech stocks early Monday before they recovered some ground.
“Investors are reacting to the heightened reality of a likely four-time interest rate hike this year, as the Fed has messaged its contention that a faster tapering could better address inflationary concerns,” said Greg Bassuk, CEO of AXS Investments, in a note to Insider on Monday.
Here’s where US indexes stood at 4:00 p.m. on Monday:
- S&P 500: 4,670.29, down 0.14%
- Dow Jones Industrial Average: 36,068.87, down 0.45% (162.79 points)
- Nasdaq Composite: 14,942.83, up 0.05%
Goldman Sachs said Monday it expects the US central bank to raise interest rates by four times in 2022.
The consumer price inflation report due Wednesday could exceed 7% after the CPI reached 6.8% in November, the highest rate since 1982.
“The producer price index (PPI) data will be released on Thursday, and investors remain laser-focused on the extent to which those wholesale prices continued to rise in December,” said Bassuk, noting the previous PPI report showed producer prices surged to 9.6% year-on-year.
Around the markets, JPMorgan’s quant guru says investors should buy the dip in stocks as markets can withstand higher interest rates. Meanwhile, Morgan Stanley’s equity strategists say the market is set for defensive stocks to take a leadership role.
Oil prices slipped. West Texas Intermediate crude fell 0.6% to $78.44 per barrel. Brent crude, the international benchmark, lost 0.8%, at $81.11.
Gold turned higher, up 0.2% to $1,800.10 per ounce. The 10-year yield gained about 1 basis point, at 1.777%.
Bitcoin declined 0.8% to $41,514.36.
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