On Monday, the benchmark equity indexes in the US displayed a mixed performance as market participants geared up for anticipated official inflation metrics for December and a series of bank earnings set to be released later this week. The Dow Jones Industrial Average made modest gains, climbing 0.9% to close at 42,297.1.
In contrast, the S&P 500 saw a slight uptick of 0.2%, ending at 5,836.2. Alternatively, the Nasdaq Composite experienced a downturn, falling 0.4% to 19,088.1, influenced considerably by sector performances. Energy and materials sectors emerged as the leading gainers throughout the market, reflecting a positive trend.
Meanwhile, utilities recorded the steepest declines, showcasing a divide in sector performance and investor confidence. Market attention sharply turns towards the upcoming US producer price index report scheduled for release on Tuesday, which is likely to set the tone for consumer inflation data expected on Wednesday. Analysts predict that the US consumer price index will have experienced a 0.3% increase on a sequential basis, alongside a 2.9% rise annually for the previous month, as noted by a consensus compiled by Bloomberg.
Insights from a survey conducted by the Federal Reserve Bank of New York revealed stability in US consumers' median inflation expectations, maintaining a steady rate of 3% for the one-year horizon in December. Interestingly, the three-year inflation outlook observed an increase to 3% from a preceding 2.6%, whereas the five-year expectations dipped slightly to 2.7% from 2.9%. In the bond market, the US 10-year yield registered a mild increment of 1.6 basis points, settling at 4.79% on Monday, while the yield on the two-year note remained relatively stable at 4.39%.
The coming days promise pivotal corporate earnings reports, with notable banks—JPMorgan Chase, Bank of America, Wells Fargo, Morgan Stanley, Goldman Sachs, and Citigroup—preparing to disclose their latest quarterly financial outcomes later this week. In corporate news, Johnson & Johnson announced a strategic acquisition of Intra-Cellular Therapies, valued at approximately $14.6 billion in cash, aimed at bolstering its neuroscience product line.
Following the news, shares of the healthcare conglomerate rose by 1.7%, marking a significant performance on the Dow, while Intra-Cellular's stock skyrocketed by 34%, reflecting investor enthusiasm. Humana illustrated strong performance as well, being among the top gainers on the S&P 500 index with a notable increase of 6.8%.
The uptick follows an adjustment by Wells Fargo, which raised its price target for the health insurer's stock from $315 to $337, underlining positive sentiment. Contrarily, shares of Moderna saw a dramatic decline, plummeting nearly 17%, which constituted the steepest drop in the S&P 500, following the company's revision of its full-year revenue forecasts downward.
Additionally, Edison International's utility in Southern California faces legal challenges attributed to its equipment being blamed for igniting a substantial wildfire in Los Angeles, leading to a 12% drop in the company's stock, registering as the second-worst performer on the S&P 500. On the commodities front, West Texas Intermediate crude oil experienced a surge, boosted by a 2.8% increase to $78.73 per barrel on Monday.
Analysts from D.A. Davidson attributed the rally in oil prices to broader US sanctions placed on Russian oil, coupled with anticipated impacts on supplies from China and India. Conversely, precious metals experienced downward trends; gold fell by 1.3%, settling at $2,680.80 per troy ounce, while silver declined by 3.3%, reaching $30.29 per ounce.
The market remains vigilant as the upcoming economic indicators and corporate reports are set to widely influence investor sentiment and future stock evaluations..