Stocks On Wall Street Trade Volatile as Investors Yearn for Stability

Barry Adams
12 Aug, 2024
New York City

Stocks lacked direction in early trading on Monday as investors reassessed wild swings from the previous week.

Earlier in the week, benchmark indexes extended the previous week's losses to 10%, but they recovered and reversed all losses as market sentiment stabilized. 

Last week's global market rout was rooted in worries about the U.S. economic slowdown after nonfarm payrolls in July rose at a slower than expected pace and the tightening of labor market conditions. 

However, market sentiment recovered after initial jobless claims fell more than expected, suggesting the labor market is still healthier than previously estimated. 

This week, investors are looking forward to the release of producer price inflation on Tuesday, consumer price inflation on Wednesday, and retail sales on Thursday. 

Investors are hoping that the Federal Reserve is set to start the rate-cut cycle with the first cut after the September meeting; however, those hopes may be dashed if inflation stays near or above 3%, as it has for several months now. 

Federal Reserve Chair Jerome Powell has confirmed after the latest policy meeting that policymakers are open to trimming interest rates if inflation continues to follow a downward path to its target rate of 2%. 

However, despite multiple rate hikes over 2022 and 2023, inflation has slowed from as high as nearly 9% to 3%. 

July’s consumer price inflation is estimated at 2.9%, and core inflation is estimated to stay near 3.2%, higher than the Fed’s target rate of 2%.

Retail sales, unadjusted for inflation but adjusted for calendar and seasonal factors, in July are likely to expand by 0.3%.

 

U.S. Indexes and Treasury Yields

The S&P 500 index gained 0.1% to 5,344.58, the Nasdaq Composite advanced 0.2% to 16,772.65, and the Russell 2000 index declined 0.2% to 2,080.92. 

The yield on 2-year Treasury notes edged higher to 4.08%, 10-year Treasury notes increased to 3.96%, and 30-year Treasury bonds inched lower to 4.24%.

WTI crude oil increased $1.06 to $77.89 a barrel, and natural gas prices edged up 7 cents to $2.22 a thermal unit.

Gold increased by $14.09 to $2,444.67 an ounce, and silver increased by $0.38 to $27.82. 

The dollar index, which weighs the US currency against a basket of foreign currencies, edged lower to 103.25.

 

U.S. Stock Movers 

Starbucks increased 2.3% to $76.82 after The Wall Street Journal reported that activist investor Starboard Value acquired a stake in a coffee retail store chain to seek a higher stock price. 

JetBlue Airways dropped 10.8% to $5.41, and the regional airline said it plans to issue $400 million of convertible senior notes in 2029. 

KeyCorp jumped 16.6% to $17.04, and The Bank of Nova Scotia acquired a 14.9% stake in the Cleveland-based bank for $2.8 billion in cash.