Stocks were mixed on Monday as market participants looked ahead towards a big week of fresh inflation data. The Dow Jones Industrial Average added nearly 50 points, while the S&P 500 Index and Nasdaq Composite lost 0.1% and 0.4%, respectively.
Here's how the market settled on Monday:
S&P 500 Index
Dow Jones Industrial Average
Nasdaq Composite Index
Moving Markets: Much of Wall Street's trade on Monday came as market participants prepared for February's consumer price index (CPI) reading due out Tuesday morning. Economists expect prices for a broad array of consumer goods and services to have risen 4% on the month and 3.1% year-over-year, according to Dow Jones consensus, climbing slightly from January's pace of 3% on the month and matching the month's annual rate.
Excluding food and energy prices, core inflation is expected to have gained 0.3% month-over-month and 3.7% annually, according to Dow Jones, representing a decline from January's monthly reading of 0.4% and annual reading of 3.9%.
Even as inflation continues to fall from its peak in mid-2022, price pressures still hamper hopes that the Federal Reserve will cut interest rates at its upcoming meeting on March 19-20, with 97% of investors expecting policymakers to maintain rates at their current level of 5.25% to 5.50%, according to CME Group's FedWatch tool. The earliest expected rate cuts are in June, with nearly 70% of investors pricing in for central bankers to cut rates to at least a range of 5.00% to 5.25%, according to the FedWatch tool.
Beyond Tuesday, market participants are also gearing up for February's U.S. retail sales report and producer price index reading on Thursday for more insights on the state of the U.S. consumer and more inflation data ahead of the Fed's meeting.
UBS warned on Monday that positive sentiment and high valuations stemming from healthy economic growth, lower inflation and artificial intelligence have created a "fertile soil for risk on moves," cautioning that a correction may lay ahead for Wall Street.
"The market looks more susceptible to pullbacks, although we don't believe investors should lose sight of the bigger picture," the bank's chief investment office wrote in a note to clients, adding that investors should stay neutral on U.S. equities.
For Tuesday: All eyes will be on February's CPI report, as well as quarterly earnings from companies including Oracle
