Stock moves were muted Monday as investors came off of a volatile trading week and looked ahead towards another busy week of inflation data that could impact the market's momentum. The Dow Jones Industrial Average fell over 140 points, while the S&P 500 Index closed at the flatline and the Nasdaq Composite advanced by 0.2%.
Here's how the market settled on Monday:
S&P 500 Index (NYSE: SPY): +0.00% or +0.23 points to 5,344.39
Dow Jones Industrial Average (NYSE: DIA): -0.36% or -140.53 points to 39,357.01
Nasdaq Composite Index (NASDAQ: QQQ): +0.21% or +35.31 points to 16,780.61
Moving Markets:
UBS analysts said Monday they see more market volatility on the horizon, but sees the foundations for growth as "constructive," as the firm expects the Federal Reserve to slash interest rates by 100 basis points by the end of the year.
"Equity market volatility has increased amid concerns about the U.S. economic outlook and mixed results from big tech companies," UBS wrote in a Monday note to clients. "But while various economic and geopolitical risks remain, we believe solid earnings growth, the prospect of lower interest rates, and rising investment in AI continue to create a constructive backdrop for equities."
Goldman Sachs saw other factors impacting Wall Street last week that caused Monday's dramatic market rout on Friday, including "a combination of leverage, crowding, and poor liquidity."
Bank of America CEO Brian Moynihan called for the Fed to cut interest rates in the near-term, arguing that consumers can become more discouraged over the health of the U.S. economy if rates remain at their current level in an interview with CBS on Sunday.
"We've won the war on inflation, it's come down. It's not where people want it yet, but we've got to be careful that we don't try to get so perfect that we actually put us in recession," Moynihan said, adding that BofA no longer forecasts a U.S. recession this year.
"People who entered the business world in 2007, 2008 have not seen this kind of interest rate environment," he added. "We're getting back to normal, and that's going to take a while for people to adjust to, both on the corporate side and commercial side and on the consumer side."
In Single-Stock News:
Starbucks (NASDAQ: SBUX) shares rose Monday amid reports that the coffee chain's directors and activist investor Elliott Management have been in talks and hedge fund Starbound Value has taken a stake. For Elliott, Starbucks is reportedly discussing a settlement that would give the activist investor representation on its board, and for Starbound, the hedge fund is calling for changes in effort to increase its stock price.
Hawaiian Electric Industries (NYSE: HE) shares slumped on Monday after the utility continues to be impacted from the fallout of last year's Maui wildfire. The company said late Friday its required to disclose an ongoing-corcen risk financial statements until it develops a plan to pay for damage settlements. Hawaiian Electric estimates its losses from the disaster to be about $1.7 billion in liabilities.
KeyCorp (NYSE: KEY) announced Monday it reached an agreement with the Bank of Nova Scotia (NYSE: BNS) for the bank to make a strategic minority investment of about $2.8 billion in KeyCorp, representing about 14.9% pro forma common stock ownership.
"This transaction creates greater capacity for growth by enabling additional investments in targeted scale across our franchise and increases Key's strategic agility as we navigate an uncertain environment from a position of strength," KeyCorp CEO Chris Gorman said in a release.
JetBlue Airways (NASDAQ: JBLU) announced a $400 million convertible senior notes offering due 2029, intending to use the net proceeds to repurchase a portion of its existing 0.50% senior convertible notes due 2026 in one or more transactions and pay fees related to the offering.
For Tuesday:
Market participants will turn their attention towards July's producer price index (PPI) reading, as well as quarterly earnings reports from companies including Home Depot (NYSE: HD) and On Holding (NYSE: ONON).