US stocks opened higher on Monday as investors neared the final stretch of earnings season and braced for a busy week of inflation data.
The S&P 500 rose 0.5% after the benchmark index posted three straight weeks of gains despite modest losses on Friday. The Dow Jones Industrial Average added 180 points, or 0.6%, and the tech-heavy Nasdaq Composite advanced 0.3%.
The moves come after stocks ended mixed in Friday’s session after a jobs report showed the US economy added twice as many jobs in July as expected. The Labor Department reported that nonfarm payrolls rose by 528,000 last month, renewing concerns that the Federal Reserve may move aggressively to raise interest rates to curb demand and lower inflation.
“It likely signals a reduced risk of a recession in the near term, but in our view increases the risk of a hard landing over time, given that strong data means the Fed has more work to do.” the Bank of America economists led by Michael. Gapen said in a note Friday.
The bank also revised upward its rate hike projections by an additional 25 basis points, calling for increases of 50 basis points in both September and November and 25 basis points in December.
NEW YORK, NEW YORK – JULY 25: People walk outside the New York Stock Exchange (NYSE) on July 25, 2022 in New York City. Stocks rose slightly in the morning as investors weighed the upcoming Federal Reserve meeting this coming Wednesday. (Photo by Spencer Platt/Getty Images)
Investors are bracing for three big inflation readings this week: the all-important consumer price index (CPI), the producer price index (PPI) and unit labor costs, a measure of all wages paid to employees.
The closely watched CPI index for July is expected to moderate slightly from last month’s reading, helped mainly by lower gas prices. However, the figure is still expected to show inflation rising at the highest rate in four decades.
Economists polled by Bloomberg had forecast that the broader CPI measure rose 8.7 percent in July, a figure that would mark a slight pullback from June’s 9.1 percent. For the month, the CPI is expected to show an increase of 0.2%, compared to 1.3% last month.
Earnings season is winding down, with roughly 87% of S&P 500 companies reporting actual results for the second quarter year to date. But more big reports are still rolling out, with names like Disney ( DIS ), Coinbase ( COIN ), Tyson Foods ( TSN ) and Rivian Automotive ( RIVN ) gaining this week.
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Alexandra Semenova is a reporter for Yahoo Finance. Follow her on Twitter @alexandraandnyc
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