New York: American equities remained close to record levels on Monday as investors prepared for earnings reports from major retailers that may reveal how consumers are coping with elevated inflation and a softening labor market.
The S&P 500 declined 0.1 percent yet stayed near the peak reached last Thursday. The Dow Jones Industrial Average dropped 163 points, or 0.3 percent, by mid-morning Eastern time, while the Nasdaq composite held nearly steady.
Market gains have largely stemmed from strong corporate profits. Companies in the S&P 500 are projected to post about 50 percent year-over-year growth in earnings per share for the quarter, according to FactSet data. This performance exceeds earlier forecasts and marks the strongest result in five years.
Most S&P 500 firms have already reported quarterly results. Remaining reports this week will come from large retailers such as Home Depot, Target and Walmart.
These companies face challenges. Consumer incomes appear less secure after U.S. employers cut more positions than they added last month. Meanwhile, household expenses continue to climb due to persistent inflation.
A recent report showed that retail sales declined last month compared with June, and executives may provide further details on current trends.
Attention also remains on developments in the Middle East and their potential effect on oil prices. Brent crude rose 0.4 percent to $88.87 per barrel, a modest change amid recent volatility.
In fixed income, Treasury yields increased slightly. The 10-year yield moved to 4.70 percent from 4.68 percent after data indicated stronger manufacturing activity in New York state.
Yields have risen from 3.97 percent before recent geopolitical events, driven by higher oil prices that increase inflation risks and raise the chance of Federal Reserve rate increases.
Earlier data suggested inflation eased last month, supporting hopes that the central bank may delay any rate decision.
Trading activity stayed subdued. L3Harris Technologies shares fell 3.2 percent after the company announced its CEO’s departure. Alphabet declined 0.7 percent despite Berkshire Hathaway increasing its stake. Constellation Brands dropped 4.8 percent after Berkshire sold its holdings.
European indexes declined after gains in Asian markets.
