By Caroline Valetkevitch
NEW YORK (Reuters) – U.S. stocks ended slightly higher on Monday following last week’s losses, but caution prevailed ahead of Wednesday’s consumer prices report and the start of second-quarter earnings later this week.
Investors are anxious to see if price pressures are continuing to moderate. That could shed light on the interest rate outlook, with many traders expecting the Federal Reserve to raise interest rates by 25 basis points this month.
Investors were digesting comments from several Fed officials who said on Monday additional rate hikes are needed to bring down inflation that is still too high, but the end to the U.S. central bank’s current monetary policy tightening cycle is getting close.
“The market is obviously poised for the opening of earnings season,” but investors are also hyper-focused on consumer prices and the outlook for interest rates, said Quincy Krosby, chief global strategist at LPL Financial in Charlotte, North Carolina.
S&P 500 company earnings are due to unofficially kick off this week with reports from some big U.S. banks. Analysts expect earnings to have fallen 6.4% in the second quarter from the year-ago period, IBES data from Refinitiv showed.
Shares of chipmaker Intel and Qualcomm rose after U.S. Treasury Secretary Janet Yellen said over the weekend that meetings with senior Chinese officials were “direct” and “productive.”
According to preliminary data, the S&P 500 gained 10.97 points, or 0.25%, to end at 4,409.92 points, while the Nasdaq Composite gained 25.36 points, or 0.19%, to 13,686.08. The Dow Jones Industrial Average rose 215.47 points, or 0.64%, to 33,950.35.
Icahn Enterprises surged after the investment firm said Carl Icahn and banks have finalized amended loan agreements that untie the activist investor’s personal loans from the trading price of his firm.
Citigroup strategists on Monday downgraded U.S. stocks to “neutral,” and said megacap growth is set for a pullback and U.S. recession risks could still bite.
(Additional reporting by Johann M Cherian and Bansari Mayur Kamdar in Bengaluru; Editing by Saumyadeb Chakrabarty, Shinjini Ganguli and Richard Chang)
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