US stocks wavered Monday, with the S&P 500 (^GSPC) flat, the Dow Jones Industrial Average (^DJI) edging down 0.22%, and the Nasdaq Composite (^IXIC) slightly advancing above the flatline at 10:20 am ET.
The Federal Reserve’s policy meeting next week came into sharper focus, after strong jobs data and the passage of the US debt ceiling bill on Friday gave investors reason for hope, with the major US stock indexes closing higher on Friday. President Joe Biden signed the bill into law over the weekend.
Crude prices were higher but paring earlier gains after Saudi Arabia on Sunday said it will slash its oil output by another 1 million barrels per day starting in July. The world’s top oil exporter is going it alone with the voluntary cut, as the Organization of the Petroleum Exporting Countries (OPEC+) and its allies agreed to stick to their current oil-production target through 2024 at their meeting this weekend.
US benchmark WTI crude futures were up over 2% at $73.62 on Monday morning, while Brent crude futures, the global benchmark, added 2.43% to trade at $78.01 a barrel.
Meanwhile, Treasury yields lost steam, with the benchmark 10-year Treasury slipping to 3.66%. The two-year yield fell to reach 4.43%, while the 30-year bond declined to 3.86%.
Speculation is growing among investors that the Fed will likely hold interest rates steady at its June 13-14 meeting, but then raise them again later this summer.
“At the moment, markets price in around a 1 in 3 chance of a hike next week and maybe CPI might be the main thing that shifts those odds towards a hike if the report is strong,” Jim Reid and colleagues at Deutsche Bank wrote to clients Monday morning.
“If the Fed wants to subtly communicate to the market one way or another ahead of next week, then well placed media stories might surface. However before CPI, that does seem unlikely, as nothing will be 100% decided until then. We are back to having a fair bit of uncertainty over the near-term Fed outlook though,” Reid added.
On the economic docket, investors digested data that showed that new orders for US manufactured goods climbed 0.4% from the previous month in April, the US Census Bureau said Monday, slowing from the downwardly revised 0.6% gain in the prior month and missing economists expectations of a 0.8% increase.
Separately, ISM services PMI fell to 50.3 in May from 51.9 in April, the lowest reading since May 2020 and below forecasts of 52.4.
Elsewhere, Apple Inc. (AAPL) is set to unveil its new hardware product on Monday at its Worldwide Developers Conference, in Cupertino, California. The iPhone maker’s shares moved higher Monday morning and were on pace to close at a record high.
In other news, shares of Palo Alto Networks, Inc. (PANW) climbed over 3% amid news that the stock will join the S&P 500 index, replacing Dish Network (DISH).
Separately, bitcoin (BTC-USD) fell to below $27,000, while ethereum (ETH) dipped to $1,866.
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Dani Romero is a reporter for Yahoo Finance. Follow her on Twitter @daniromerotv
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