NEW YORK: Wall Street’s main indexes were subdued on Monday after a recent rally that took the S&P 500 and the Dow to record highs, as investors weighed Middle East developments that lifted oil, while awaiting crucial inflation data and earnings.
Iran said it was close to a final agreement with Oman defining new shipping lanes between them, but repeated that the US must meet several conditions before the strategic waterway reopens.
Brent crude prices gained more than 4 percent on Monday as Iran’s insistence left the outlook for the Strait of Hormuz’s reopening murkier. Easing energy flows through the crucial choke point could mitigate concerns over heightened oil prices that have spurred inflation worries and betson interest rate hikes by central banks worldwide.
Investor focus now turns to consumer and producer inflation readings due later this week, which could offer clues on the Federal Reserve’s monetary policy path, given Fed Chair Kevin Warsh’s stance of offering muted forward guidance.
Rate-hike bets were tempered on Friday after data showed the US economy unexpectedly shed jobs in July. Traders now price in a 44 percent chance of a rate hike in September, according to the CME FedWatch tool.
“Investors (are) just really looking through on the fundamentals. There’s a lot of headlines, a lot of geopolitical worry, there’s inflation concerns, but at the end of the day, we still see strong earnings growth and we still see a resilient consumer,” said Bret Kenwell, US investment analyst at eToro.
In the market, the S&P 500 energy index jumped 3.3 percent. However, weakness in real estate and utilities offset gains. The S&P 500 information technology index lost 0.4 percent. Apple declined 2 percent following a stock downgrade by Jefferies, while Intel dropped 3.2 percent after launching a USD15 billion stock offering.
At 11:56 a.m. ET, the Dow Jones Industrial Average fell 46.64 points, or 0.09 percent, to 53,991.40, the S&P 500 gained 6.98 points, or 0.09 percent, to 7,764.62 and the Nasdaq Composite lost 26.49 points, or 0.10 percent, to 26,663.65.
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