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US stocks advanced on Monday, following a global equity sell-off last week, as investors took some positive signs from last week’s jobs report and turned their attention to inflation data due on Thursday.
Wall Street’s benchmark S&P 500 gained 0.9 per cent, led higher by tech and media stocks, as well as those in the financial sector. The tech-focused Nasdaq Composite gained 0.6 per cent.
Shares of Warren Buffett’s conglomerate Berkshire Hathaway closed at a record high after it reported on Saturday that it recorded a $35.9bn profit in the three months ending in June. It had posted a $43.6bn loss in the year-ago quarter.
The broader moves on Wall Street follow the non-farm payrolls report released on Friday, which showed the US economy added 187,000 jobs in July, fewer than the 200,000 forecast by economists polled by Reuters. Wage growth, however, exceeded expectations.
The jobs report showed that while hiring is slowing, “the economy is far from falling off a cliff”, said Bob Schwartz, senior economist at Oxford Economics.
“The unemployment rate is historically low, and wages are increasing faster than inflation, boosting household purchasing power. If these trends continue, the odds of a soft landing would increase.”
Some investors took profits on Friday after a prolonged stock market rally that has lifted the S&P 500 more than 17 per cent since the start of the year, and boosted the Nasdaq Composite by about one-third.
“It’s important for investors to remain vigilant and not become complacent, as the market’s inflation and Federal Reserve fears remain intact,” said Ryan Belanger, founder of wealth management firm Claro Advisors.
Signs of a slowing jobs market have emerged more than a year after the US central bank began its aggressive monetary tightening campaign, which has brought the benchmark federal funds rate to its highest level in 22 years in an effort to tackle rising inflation.
While traders expect the Fed to keep rates steady at its next meeting in September, policymakers signalled that their decision would depend on a number of economic data releases due before then.
“For now, investors are awaiting a sense of direction, and the data points will offer some clarity,” said Shanti Kelemen, chief investment officer at M&G Wealth.
Yields on the policy-sensitive two-year US Treasury fell 0.01 percentage points to 4.79 per cent, while yields on the benchmark 10-year note rose by 0.04 percentage points to 4.1 per cent. Bond yields gain as prices fall.
Investors are turning their attention to the US consumer price index coming out on Thursday. The data is expected to show that the country’s annual headline inflation rate accelerated to 3.3 per cent in July from 3 per cent the previous month.
Meanwhile, oil prices retreated after hitting their highest levels in almost four months, amid concerns over an escalation of fighting in the war in Ukraine and production cuts by Saudi Arabia.
Brent crude, the international benchmark, settled 1 per cent lower to $85.34 a barrel, having earlier reached its highest levels since mid-April, while US marker West Texas Intermediate fell 1.1 per cent to $81.94 a barrel.
Russia’s rouble fell more than 2 per cent against the dollar, hitting its lowest level since March 2022, shortly after the country’s full-scale invasion of Ukraine. Losses pared later in the session.
The currency has weakened since late June, hit by the Wagner Group uprising and declining further after Ukraine’s drone strikes on Russian shipping over the weekend raised concerns that the war is intensifying.
Mixed investor sentiment echoed in Europe and Asia, as trading volumes were subdued over the August holiday period, and markets awaited more data to settle on a direction.
The region-wide Stoxx Europe 600 ended the choppy session 0.1 per cent higher, while France’s Cac 40 gained 0.1 per cent and Germany’s Dax was flat. In Asia, the Chinese benchmark CSI 300 lost 0.8 per cent, while Hong Kong’s Hang Seng index was flat.
