US stocks were volatile on Monday as investors kicked off a big week that will see inflation data again test interest rate cut views and the start of first-quarter earnings season.
The Dow Jones Industrial Average (^DJI), S&P 500 (^GSPC) and Nasdaq Composite (^IXIC) hesitated around the flat line after opening with slight gains.
A strong jobs report helped lift stocks on Friday but was unable to stave off weekly losses as doubts about the Federal Reserve's intention to cut interest rates clouded minds.
US bonds sold off last week amid this uncertainty, and the pressure continued on Monday with a slight rise in the 10-year Treasury yield (^TNX) above 4.45%. While the index pared its gains, it remains close to the key level of 4.5% that some see as a potential turning point for a rise towards last year's highs.
Other concerns added to the unsettled mood: divided views on policy among Fed spokesmen, growing hype around the upcoming US presidential election, and rising oil prices due to escalating tensions in the Middle East that could stoke inflationary pressures.
All of this puts more focus on the release of the Consumer Price Index on Wednesday, a key input into the Fed's decision-making process and evidence of the US economy's continued resilience. Investors will be watching for signs that inflation is returning to its downward trend in March after signs of stabilization in readings earlier this year.
Meanwhile, the market is gearing up for the new earnings season, with Delta Air Lines (DAL) setting the stage on Wednesday for major bank results on Friday. Overall, Wall Street expects the first quarter to set the tone for a strong year of earnings growth among S&P 500 companies, hopes boosted by strong March employment numbers.
Against this background, the price of gold rose above $2,350 per ounce to record a new record high. Meanwhile, oil was reaching recent multi-month highs as the market assessed easing tensions in the Middle East. Brent crude futures (BZ=F) were slightly lower at $90.80 per barrel, while West Texas Intermediate crude futures (CL=F) were slightly higher at just under $87.
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