U.S. Stocks Little Changed Ahead Of Inflation Data

After moving modestly lower earlier in the session, stocks are turning in a relatively lackluster performance in afternoon trading on Monday. The choppy trading comes on the heels of the rally seen last Friday.

Currently, the major averages are turning in a mixed performance. While the Nasdaq is up 4.36 points or less than a tenth of a percent at 12,239.78, the S&P 500 is down 1.20 points or less than a tenth of a percent at 4,135.05 and the Dow is down 84.67 points or 0.3 percent at 33,589.71.

The lackluster performance on Wall Street comes as traders look ahead to the release of key inflation data later in the week.

The reports on consumer and producer price inflation, which are due to be released on Wednesday and Thursday, respectively, could have a significant impact on the outlook for interest rates.

Ahead of the data, CME Group’s FedWatch Tool is currently indicating an 86.9 percent chance the Federal Reserve will leave interest rates unchanged at its next meeting in June.

Fed Chair Jerome Powell said following last week’s rate hike that the central bank would take a “data-dependent approach” to future monetary policy decisions.

In U.S. economic news, the Commerce Department released a report showing U.S. wholesale inventories were unexpectedly unchanged in the month of March.

The report said wholesale inventories were virtually unchanged in March, while revised data showed inventories were also unchanged in February.

Economists had expected wholesale inventories to inch up by 0.1 percent, matching the uptick originally reported for the previous month.

Sector News

Most of the major sectors are showing only modest moves on the day, contributing to the lackluster performance by the broader markets.

Telecom stocks have shown a significant move to the downside, however, with the NYSE Arca North American Telecom Index falling by 1.4 percent.

Notable weakness is also visible among tobacco stocks, as reflected by the 1.2 percent drop by the NYSE Arca Tobacco Index.

Biotechnology and commercial real estate stocks are also seeing some weakness on the day, while oil and airline stocks have moved to the upside.

American Airlines (AAL) is leading the airline sector higher after JPMorgan upgraded its rating on the company’s stock to Overweight from Neutral.

Other Markets

In overseas trading, stock markets across the Asia-Pacific region moved mostly higher on Monday, although Japan’s Nikkei 225 Index bucked the uptrend and slid by 0.7 percent. China’s Shanghai Composite Index surged by 1.8 percent, while Hong Kong’s Hang Seng Index jumped by 1.2 percent.

Meanwhile, the major European markets turned in a lackluster performance on the day. While the U.K. markets were closed on the day, the French CAC 40 Index inched up by 0.1 percent and the German DAX Index edged down by 0.1 percent.

In the bond market, treasuries are extending the sharp pullback seen in the previous session. As a result, the yield on the benchmark ten-year note, which moves opposite of its price, is up by 5 basis points at 3.496 percent.

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