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The 30-stock index recovered 450 points from the lows of the day to end with gains on Monday. The S&P 500 too closed above the flat line, while the Nasdaq recovered close to 300 points off the lows of the session but ended in the red.
Palantir and Nvidia, stocks popular among retail investors ended lower, putting pressure on the Nasdaq. Energy sector was the outperformer in-line with the surge seen in oil prices.
The yield on 10-year Treasuries advanced three basis points to 4.79%. The Bloomberg Dollar Spot Index was little changed. Oil rallied to the highest level in five months.
One of the two inflation reports will be released in the US later this evening with the wholesale inflation data. The retail inflation print will be released on Wednesday.
“While even cooler-than-expected inflation data this week won’t nudge the Fed into another rate cut this month, it may help ease some of the bearish momentum — as could a solid start to earnings season,” according to Chris Larkin at E*Trade from Morgan Stanley.
Earnings season kicks into full gear this week with reports from the financial sector. Banks including JPMorgan Chase & Co. and Wells Fargo & Co. are expected to show continued gains from trading and investment banking, which helped offset net interest income declines caused by higher deposits and sluggish loan demand.
Lenders will also be quizzed about the 2025 outlook — as the Fed has signaled fewer rate cuts this year, which could stunt future profit growth.
Options traders are bracing for one of the most-volatile earnings periods in history. They expect individual stocks in the S&P 500 to move 4.7% on average in either direction after reporting their results, the largest earnings-day moves on record, according to strategists at Bank of America Corp.
“We believe this earnings season will once again be stock pickers’ paradise,” Savita Subramanian, head of US equity and quantitative strategy, wrote Monday.
Meantime, HSBC strategists led by Max Kettner say their sentiment and positioning indicators are already flashing a mild buy signal. They noted that a hawkish surprise from US data this week including on inflation and retail sales could present a buying opportunity for risk assets.
“Some bad news would be good news right now,” the strategists wrote.
(With Inputs From Agencies.)
