In a moment of cautious optimism, US benchmark equity indexes concluded their trading sessions mixed as investors braced for significant inflation data set to release later this week. The Dow Jones Industrial Average experienced a decline of 0.4%, settling at 39,357, while the Nasdaq Composite edged up by 0.2% to reach 16,780.6.
Meanwhile, the S&P 500 remained relatively stable, showing little change at 5,344.4. Among the sectors, real estate and communication services suffered the most considerable declines, while technology exhibited a positive trend, signaling investor confidence in leading tech firms. As we turn our attention to economic currents, the anticipation mounts for the official US producer price report for July, scheduled to be unveiled on Tuesday.
Following closely will be the consumer inflation data, which is due for release on Wednesday. Projections suggest that the consumer price index is expected to have risen by 0.2% on a sequential basis and 3% on an annual scale, based on a consensus compiled by Bloomberg. "In conjunction with a cooler employment report for July, any improvements in price pressures, no matter how minimal, could provide a green light for the Federal Reserve to consider reducing the federal funds rate," stated Stifel in a recent commentary. In a noteworthy development, inflation expectations among US consumers for the medium term have tumbled to a historic low in the previous month, while both short- and long-term outlooks have remained steady, as reported by the Federal Reserve Bank of New York. In the bond market, the yield on the two-year note fell by 4.2 basis points to 4.01%, and concurrently, the yield on the 10-year rate dipped by 3.8 basis points, settling at 3.90%.
These movements signify shifting investor sentiments regarding future inflation and monetary policy. Turning to commodities, West Texas Intermediate crude oil witnessed a sharp increase, jumping 3.6% to $79.63 a barrel. However, the Organization of the Petroleum Exporting Countries (OPEC) downgraded its global oil demand forecasts for 2024 and 2025, reflecting concerns over slowing growth prospects in China this year. On a separate note, according to a report by The Wall Street Journal, Israel has placed its military forces on high alert, amid heightened fears of a possible response from Iran and Hezbollah following the recent assassinations of militant leaders in Tehran and Beirut. In the corporate arena, JetBlue Airways' (NYSE: JBLU) shares took a significant hit, plummeting by 21% after the airline announced its intentions to execute a $400 million private placement of convertible senior notes due in 2029.
This marked a pronounced reaction from the market, mirroring investor apprehension regarding the company's future financial maneuverings. Conversely, KeyCorp (NYSE: KEY) managed to secure a robust $2.8 billion investment from Bank of Nova Scotia (TSE: BNS) in exchange for a minority stake in the US-based bank.
Following this announcement, KeyCorp's stock surged by 9.1%, making it the top performer on the S&P 500, while Scotiabank's US-listed shares declined by 3.6%, indicating divergent investor sentiment. Nvidia (NASDAQ: NVDA) saw its shares rise by 4.1%, placing it among the top gainers on both the S&P and the Nasdaq indexes.
The technology powerhouse is anticipated to release stronger-than-expected fiscal Q2 results later this month, bolstered by significant strength in its data center segment, according to UBS Securities. As we look forward, major retail players such as Walmart (NYSE: WMT) and Home Depot (NYSE: HD) are also slated to announce their financial results later this week, adding another layer of intrigue to the market dynamics. The results reported by S&P 500 companies have helped to mitigate bearish forecasts regarding an earnings recession, as noted by Oppenheimer Asset Management.
An impressive count of 455 companies from this benchmark equity index have reported results thus far during the current earnings cycle, with overall performance skewing more positively than negatively, according to their analysis. In commodities trading, gold showed resilience, rising by 1.5% to reach $2,511.60 per troy ounce, while silver also found its footing, increasing by 1.6% to $28.02 per ounce, reflecting shifts in investor interest in precious metals amidst fluctuating economic indicators..