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US stocks ended Monday’s session mixed, with the Nasdaq trailing rival indexes.
Investors returned from the Good Friday break anticipating another Fed rate hike after the March jobs report.
Consumer inflation data and the first bank earnings after Silicon Valley Bank’s collapse are due this week.
US stocks finished mixed on Monday with tech stocks hurt as investors priced in the potential of another interest rate increase by the Federal Reserve ahead of inflation data due this week.
The Nasdaq Composite fared the worst among Wall Street’s major stock indexes. The Nasdaq and the S&P 500 finished lower at the end of last week’s trading action that was shortened by the Good Friday holiday.
Among individual moves Monday, Tesla stock dropped after the company cut prices again for its electric vehicles.
Traders entered Monday’s session with a fresh warning about a recession from Bank of America, which shared 12 charts indicating the US is on the verge of entering a contraction. But traders were also continuing to price in expectations the Fed will raise interest rates again by 25 basis points, with those odds rising to 71% during the day.
“We continue to believe that a mild recession is on the horizon and that volatility will likely remain elevated as an economic contraction plays out,” Brent Schutte, chief investment officer at Northwestern Mutual Wealth Management, wrote in a note Monday.
“However, we reiterate our belief that any such recession will be mild and, importantly, will also serve as the final nail in the inflationary coffin.”
Here’s where US indexes stood at the 4:00 p.m. closing bell on Monday:
S&P 500: 4,109.11, up 0.10%Dow Jones Industrial Average: 33,586.52, up 0.30% (101.23 points)Nasdaq Composite: 12,084.36, down 0.03%
Monday was the first full session for stock investors to react to Friday’s March jobs report. The US economy added 236,000 nonfarm payrolls last month, below the 239,000 median forecast and cooling from February’s 326,000 reading. The unemployment rate fell to 3.5%, and the labor force participation rate rose.
“Visibility into the persistence of inflation, direction of interest rates, and pace of earnings growth should improve this week,” Terry Sandven, chief equity strategist at US Bank Wealth Management, told Insider in emailed comments.
Coming later this week will be the March consumer price index report and the first quarterly results from big banks after the collapses of Silicon Valley Bank and Signature Bank.
Financial results are due on Friday from JPMorgan Chase, Citigroup, and Wells Fargo, which have seen surges in deposits while regional banks have seen big withdrawals.
“FOMC minutes from the March 22 meeting are scheduled to be released on Wednesday. Market watchers will focus on any language that may signal future Fed action, including no action,” Sandven wrote. Meanwhile, “keen interest will be on the balance-sheet status of banks, including lending and deposit trends.”
Investors, by odds of nearly 70%, are expecting the Fed to raise interest rates by another 25 basis points, to a range of 5%-5.25% at its May 2-3 meeting. That would be the 10th consecutive rate increase.
Here’s what else is happening today:
FTX collapsed because of “hubris, incompetence, and greed,” said the first debtors’ report.Housing is so unaffordable that banks are losing money for each mortgage they financed last year. A rare bullish stock market indicator flashed for the first time since 2019. Just 20 stocks on the S&P 500 are responsible for nearly all its gains this year as Big Tech leads rally.Activist investors launching fights against boardrooms worldwide just had busiest ever quarter.
In commodities, bonds, and crypto:
West Texas Intermediate crude turned lower, falling 1.2% to $79.77 per barrel. Brent crude, the international benchmark, rose 1.1% to $84.21. Gold fell 1.1% to $2,004.80 per ounce. The 10-year Treasury yield rose 3 basis points to 3.41%.Bitcoin rose 0.9% to $29,198.09