A renewed wave of dip buying spurred a rebound in stocks after a selloff triggered by economic concerns, with traders now looking to this week’s inflation data for clues on the size of Federal Reserve rate cuts.
The S&P 500 halted a four-day losing streak as buyers scooped up bargains. The equity gauge bounced back following its worst start to a September since data going back to 1953, according to data compiled by Bespoke Investment Group.
“We’re seeing mostly technical dip-buying,” said Tom Essaye at The Sevens Report. “Economic growth is undoubtedly and clearly losing momentum, but a soft landing remains more likely than a hard landing. This week focus turns back to inflation.”
Traders pared the chance of a half-point rate reduction at the Fed’s upcoming September meeting to about 20% from as high as 50% last week.
The market has been divided for weeks on whether tamed inflation and signs of deterioration in employment figures will prompt the Fed to kick-off its easing campaign with a 25-basis-point cut — the standard move — or something larger. Investors are also unsure of what comes next, and whether the US central bank will aggressively lower rates or adopt a more gradual approach.
The S&P 500 rose 0.8%. The Nasdaq 100 climbed 0.9%. The Dow Jones Industrial Average added 0.6%. While Apple Inc.’s iPhone 16 line will be the focus of its product launch event Monday, its slumping wearable-device business is poised to get a boost as well. The event kicks off from the company’s headquarters in Cupertino, California, at 10 a.m. local time.
Treasury 10-year yields advanced two basis points to 3.73%. The dollar gained.
Corporate Highlights:
- Cloud computing has been one of the first industries to get a demonstrable boost from artificial intelligence. Oracle Corp.’s quarterly results on Monday are likely to extend that trend.
- Boeing Co. shares rallied on optimism that a labor deal with its largest union will help the troubled US aircraft manufacturer avoid a potentially crippling strike at its Seattle-area factories.
- Alphabet Inc.’s Google heads back to court Monday to face US Justice Department allegations that it manipulates the $677 billion display advertising market in violation of antitrust laws, just one month after losing a landmark ruling that it illegally dominates online search.
- Discount retailer Big Lots Inc. has filed for bankruptcy protection and plans to sell the firm’s assets and ongoing business in a court-supervised process.
- PayPal Holdings Inc. added Shopify Inc. to its list of recent partnerships, reaching a deal to process some of the payment company’s debit- and credit-card transactions.
- B. Riley Financial Inc., the embattled broker-dealer and investment firm, outlined preliminary plans to sell assets and round up financing to cope with its debt burden and shore up its balance sheet.
Key events this week:
- China trade, Tuesday
- Germany CPI, Tuesday
- US presidential debate between Donald Trump and Kamala Harris, Tuesday
- US CPI, Wednesday
- Japan PPI, Thursday
- ECB rate decision, Thursday
- US initial jobless claims, PPI, Thursday
- Eurozone industrial production, Friday
- Japan industrial production, Friday
- U. Michigan consumer sentiment, Friday
Some of the main moves in markets:
Stocks
- The S&P 500 rose 0.8% as of 9:30 a.m. New York time
- The Nasdaq 100 rose 0.9%
- The Dow Jones Industrial Average rose 0.6%
- The Stoxx Europe 600 rose 0.6%
- The MSCI World Index rose 0.4%
- Bloomberg Magnificent 7 Total Return Index rose 1.3%
- The Russell 2000 Index rose 0.2%
Currencies
- The Bloomberg Dollar Spot Index rose 0.2%
- The euro fell 0.3% to $1.1050
- The British pound fell 0.2% to $1.3097
- The Japanese yen fell 0.5% to 142.95 per dollar
Cryptocurrencies
- Bitcoin rose 1.8% to $55,383.01
- Ether rose 1.5% to $2,310.09
Bonds
- The yield on 10-year Treasuries advanced two basis points to 3.73%
- Germany’s 10-year yield advanced two basis points to 2.20%
- Britain’s 10-year yield advanced one basis point to 3.90%
Commodities
- West Texas Intermediate crude was little changed
- Spot gold rose 0.2% to $2,503.51 an ounce
