U.S. stocks rose on Monday, as investors awaited further clues about interest rates from a series of Federal Reserve officials and crucial market readings during this holiday-shortened week.
The major indices are poised to start a new week with gains, recovering from Friday’s losses but continuing the positive tone seen last quarter as the second half of the year begins.
For the quarter, the S&P 500 and the Nasdaq Composite both added 3.8%, while the Dow Jones Industrial Average lost about 1.7%. The Nasdaq posted its third straight positive quarter for the first time since a five-quarter streak that ended in 2021, with top tech stocks leading the way on the back of enthusiasm for all things artificial intelligence.
Payrolls and Fed comments in focus
This week, the focus will be on Friday’s release of key July nonfarm payrolls data. The reading will provide more information about the labor market as its resilience has also become a key focus for the Federal Reserve regarding rate cuts.
The PCE price index, a key inflation gauge for the Fed, indicated last week that inflation was slowing gradually, meaning that there continues to be a lot of uncertainty about when the U.S. central bank will cut interest rates.
Ahead of Friday’s nonfarm payrolls report, a further decline in May job openings is expected.
On Wednesday, the minutes from the Fed’s June meeting will be released, which will look at the central bank’s view of the economic outlook and the factors affecting the outlook for monetary policy.
In addition, several Fed officials will speak this week, most notably Fed Chairman Jerome Powell, who will have the opportunity to address the European Central Bank’s annual forum in Portugal on Tuesday.
Boeing Agrees to Purchase DW Spirit Aerosystems
Thursday’s Independence Day holiday shortens the stock market week, while uncertainty regarding the 2024 presidential election, following a debate between President Joe Biden and rival Donald Trump, will also keep sentiment on hold.
Among individual stocks, Boeing (BA) shares lost about 1% premarket after the aircraft maker agreed to buy Spirit Aerosystems (SPR), up about 6.5%, for about $4.7 billion, ending a long-running negotiation that was complicated by contracts Spirit had with Boeing’s main competitor, Airbus (AIR).
Tesla (TSLA) shares rose nearly 2% before the market opened despite the electric car maker’s deliveries plunging by nearly 3.7%, the first time it has posted two straight quarterly losses.
Manufacturing PMI supports crude oil
Oil prices rose on Monday, helped by a private survey that showed Chinese manufacturing activity grew more than estimated in June, raising hopes that the large economy is steadily recovering.
The Caixin manufacturing PMI came in at 51.8 in June, in contrast to expectations for a reading of 51.5, and last month’s reading of 51.7.
The reading contrasts with government PMI data released on Sunday, which indicated that China’s manufacturing sector shrank for the second month in a row in June.
Given that China is the world’s largest importer of crude oil, the recovery in its manufacturing sector bodes well for an increase in demand in the second half of the year.
