Equity markets in the United States demonstrated positive momentum following midday on Monday, as investors scrutinized fresh insights from a survey focused on consumers' inflation expectations. The Dow Jones Industrial Average showcased a robust increase of 1.4%, reaching 40,909.2 at intraday trading.
Meanwhile, the S&P 500 climbed by 1.3%, hitting 5,475.1, and the Nasdaq Composite advanced by 1.1% to settle at 16,881.5. Notably, all sectors contributed to this growth, with financials and industrials leading the way. In pertinent economic developments, a report from the Federal Reserve Bank of New York indicated that US consumers’ inflation expectations had a rebound for the medium-term outlook in August, while the one- and five-year predictions remained stagnated.
The labor market's outlook was described as 'mixed, but largely stable', according to statements from the New York Fed. Anticipation builds as government data expected on Wednesday is projected to reveal that consumer inflation in the United States incremented by 0.2% on a sequential basis, and 2.6% annually for the previous month, based on a consensus compiled by Bloomberg.
In addition, the official producer prices report for August is set to be disclosed on Thursday. On the employment front, data released by the Bureau of Labor Statistics on Friday illustrated that the US economy added fewer jobs than analysts had forecasted in August; however, the unemployment rate did show a slight decline. According to Stifel's Monday note to clients, 'A weaker-than-expected rise in topline hiring coupled with no further upward momentum in inflation last month seems to solidify the Fed's intention for a first-round rate cut provision later this month.' However, they caution that the absence of significant declines in price pressures, alongside a drop in the unemployment rate and stronger wage growth, diminishes the perceived need for a more aggressive policy approach, whether that implies a more substantial rate cut or a quicker pathway to such a decision. As of Monday, the likelihood of a 25-basis-point interest rate reduction next week has risen to 73%, up from 70% that was observed on Friday, while the chances of a more substantial 50-basis-point cut have decreased to 27%, down from 30%, as per insights from the CME FedWatch tool. In the bond market, the US two-year yield rose slightly, gaining 1.3 basis points to reach 3.66% intraday, while the 10-year yield experienced a minor decline of 1.5 basis points to hover at 3.7%. Shifting focus to corporate developments, shares of Boeing ($BA) surged by 3.5%, making it the best performer on the Dow index.
The aircraft manufacturing giant announced on Sunday that it has secured a tentative labor agreement with the International Association of Machinists and Aerospace Workers, which represents over 33,000 employees. Additionally, Moderna ($MRNA) announced on Monday that it has received Health Canada's Drug Establishment License for its production facility located in Laval, Quebec.
This positive news contributed to a 6% increase in the company's shares, placing them among the top gainers on both the S&P 500 and the Nasdaq. In an intriguing acquisition move, Progress Software ($PRGS) has reached an agreement to purchase ShareFile, a software-as-a-service document collaboration business belonging to Cloud Software Group, for a total of $875 million.
Conversely, shares of Progress saw a decline of 1.6% during intraday trading. Looking ahead, Oracle ($ORCL) and Rubrik ($RBRK) are slated to release their latest quarterly financial results subsequent to Monday's market close. In commodities, West Texas Intermediate crude oil prices have shown an uptick, rising by 1.4% to position themselves at $68.63 per barrel during intraday trading sessions.
Additionally, gold prices increased by 0.3%, reaching $2,532.80 per troy ounce, while silver enjoyed a 1.6% rise, landing at $28.65 per ounce..