Spencer Platt/Getty
- US stocks climbed on Monday as investors turn their attention to the upcoming July CPI report.
- The inflation data will inform the Federal Reserve as to whether more interest rate hikes are needed.
- The CME FedWatch Tool suggests the Fed is done hiking interest rates and will cut rates in March 2024.
US stocks moved higher on Monday as investors turn their attention to upcoming inflation data and whether that will impact the trajectory of the Federal Reserve's current interest rate trajectory.
July CPI data will be released later this week on Thursday. That, combined with the August jobs report and the August CPI report will inform the Fed as to whether they hike interest rates again at their September FOMC meeting. A recent surge in gas prices could impact the upcoming inflation reports.
According to the CME FedWatch Tool, the Fed is expected to keep the Fed Funds Rate at its current range of 5.25% to 5.50% until March 2024, when the central bank is expected to slightly cut interest rates by 25 basis points. For the Fed to cut interest rates, inflation would have to be decisively on track to near the Fed's long-term 2% target.
Investors are also digesting second-quarter earnings results, which have mostly beat earnings estimates. With 85% of S&P 500 companies having already reported results, 81% are beating profit estimates by a median of 7%, while 64% are beating revenue estimates by a median of 3%, according to data from Fundstrat.
Here's where US indexes stood shortly after the 9:30 a.m. ET opening bell on Monday:
- S&P 500: 4,497.26, up 0.4%
- Dow Jones Industrial Average: 35,306.18, up 0.7% (241 points)
- Nasdaq Composite: 13,907.69, down less than 0.1%
Here's what else is happening this morning:
- Warren Buffett's Berkshire Hathaway reported second-quarter earnings over the weekend. The conglomerate is growing its profits while it sits on a cash pile of nearly $150 billion.
- As the US labor market remains strong, some investors are anticipating a higher for longer period of elevated interest rates.
- The world's six richest people have gained a combined near-$1 trillion in wealth so far this year amid a sizable stock market rally.
In commodities, bonds and crypto:
- West Texas Intermediate crude oil fell 0.66% to $82.27 per barrel. Brent crude, oil's international benchmark, dropped 0.61% to $85.71
- Gold dropped 0.05% to $1,975.10 per ounce.
- The yield on the 10-year Treasury jumped 3 basis points to 4.07%.
- Bitcoin fell 0.09% to $29,019, while ether was flat at $1,827.