A slightly higher start for U.S. stocks evaporated shortly after the opening bell, with major indexes drifting into negative territory. The S&P 500’s real-estate and consumer discretionary sectors led the way lower.
“This week’s inflation data arrives at a key moment for the stock market, which is coming off its most volatile week of the year. In the span of just a few weeks, the discussion has shifted from whether the economy has slowed enough, to concerns it may be getting stuck in the mud,” said Chris Larkin, managing director for trading and investing at E-Trade from Morgan Stanley, in emailed comments.
“Investors will be looking for the numbers to land in a sweet spot—cool enough that no one will be second-guessing the likelihood of a September rate cut, but warm enough to push aside the recession concerns that have rattled the markets recently,” he wrote.
The July consumer price index, due Wednesday morning, is seen as the main event in terms of this week’s economic data. Analysts surveyed by the Wall Street Journal, on average, expect both the headline CPI reading and the core figure, which excludes volatile food and energy prices, to show a 0.2% rise. CPI is seen at 3% year over year, unchanged from June, while the core rate is seen slowing to 3.2% from 3.3%. The CPI reading follows the July producer price index, set for release Tuesday morning.