US stocks rose on Monday, trading in tight ranges ahead of the release of key inflation data due later this week, which is likely to influence the interest rate environment.
Wall Street indices started the new week on a positive note, building on three consecutive weeks of gains, buoyed by strong results and the prospect of potential interest rate cuts this year.
As of Friday, approximately 90% of the companies in the S&P 500 have released their results, with around 80% surpassing estimates.
Market’s attention focuses on upcoming inflation data
Gains may be limited in the coming sessions as markets await key inflation data—specifically the producer price index and consumer price index due on Tuesday and Wednesday, respectively.
Investors will closely monitor any signs of cooling inflation, especially after price pressures unexpectedly rose in the first quarter of 2024, diminishing hopes for an early interest rate cut.
If this trend continues, it is likely to further delay any attempts to cut rates. Although this week’s inflation data might indicate some cooling, the figures are expected to stay above the Fed’s annual target of 2%.
Before the release of the inflation data, Fed officials are expected to provide further insights. Cleveland Fed President Loretta Mester will lead today, Monday, following signals from her colleagues last week that inflation, as a trigger for interest rate cuts, seemed to be easing.
Retail sector results
The quarterly earnings season is nearing its end, yet this week, major retailers like Walmart (WMT) and Home Depot (HD) will release results, providing fresh insights into the health of the US consumer.
Elsewhere, Arm Holdings (NASDAQ:ARM) rose 4% after announcing plans to develop artificial intelligence chips. According to a Nikkei Asia article, the UK-based chip designer intends to create a dedicated artificial intelligence chip division.
The report states that Arm aims to build a prototype by spring 2025 and expects mass production, likely by contract manufacturers, to commence in autumn 2025.
Intel (INTC) gained 1% following a Wall Street Journal report that the tech giant is in advanced talks with Apollo Global Management (APO) to build an $11 billion chip plant in Ireland.
Tesla (TSLA) rose 0.9% following Reuters reports that President Joe Biden will announce new tariffs on China on Tuesday, targeting sectors including electric cars, medical supplies, and solar equipment.
