Stocks fell on Monday in a choppy first session of August trading as market participants weighed whether or not the recent rally will continue after the best month since 2020. All three major indexes snapped three-day winning streaks, with the S&P 500 slipping the most by about 0.3%.
Here's how the market settled on Monday:
S&P 500 Index (NYSE: SPY): -0.28% or -11.66 points to 4,118.63
Dow Jones Industrial Average (NYSE: DIA): -0.14% or -46.73 points to 32,798.40
Nasdaq Composite Index (NASDAQ: QQQ): -0.18% or -21.71 points to 12,368.98
Monday's moves follow a strong month of gains in July. For the month, the S&P 500 soared 9.1%, which the Nasdaq Composite rallid 12.3% to post one of its best months on record boosted by tech momentum. The Dow also rose 6.7% for the month.
Market participants were met with some economic data during the session, including manufacturing activity that expanded at the slowest pace in over two years. The Institute for Supply Management's (ISM) factory activity index reading for July decelerated to 52.8 from 53 in the previous month, or the lowest level since June 2020. However, readings above the neutral level of 50 indicate expansion in a sector and the report was better than most analysts expected.
The ISM's report boosted semiconductor sentiment, with shares of AMD (NASDAQ: AMD) and Nvidia (NASDAQ: NVDA) rebounding on Monday.
Meanwhile, the energy sector traded lower on Monday as oil prices fell in response to the ISM report. West Texas Intermediate (NYSE: WTI) crude oil futures dropped 4.8% to settle at $93.89 per barrel, while Brent Crude (NYSE: BNO) futures fell 3.8% to settled at $100.03 each. Shares of Chevron (NYSE: CVX), Diamondback Energy (NASDAQ: FANG), and ExxonMobil (NYSE: XOM) all traded lower.
Elsewhere, JPMorgan's (NYSE: JPM) Marko Kolanovic issued an optimistic outlook on stocks moving into the second half of the year.
"Although the near term activity outlook remains challenging, we believe that the risk-reward for equities is looking more attractive as we move through 2H," the strategist wrote in a note on Monday. Kolanovic also noted that some encouraging signs are starting to emerge, despite the recent lackluster GDP report, "as firms sharply slowed their pace of stockbuilding, and real consumption eked out a gain in June as households continue to cushion inflation shocks with a lower savings rate."
Looking ahead, market participants are getting reading for another busy week for economic data and corporate earnings, with another 150 companies on the S&P 500 set to report second quarter earnings this week. The Labor Department is also scheduled to issue July's jobs report on Friday, with analysts expecting non-farm payrolls to increase by 250,000.
After market close, companies like Activision Blizzard (NASDAQ: ATVI) and Pinterest (NASDAQ: PINS) are set to report earnings.