U.S. Stock Markets Rebound Ahead of Key Inflation Reports

Major U.S. stock indexes experienced a rebound during early trading on Monday, as investors sought to recover from the previous week’s significant market downturn.

The S&P 500 and Nasdaq Composite rose by 0.8% and 0.7% respectively, while the Dow Jones Industrial Average gained 0.9%. The upward movement came on the heels of the August jobs report, which indicated changes in the labor market.

Tech stocks, particularly mega-cap companies, displayed mixed results early on. Investor favorite Nvidia saw a nearly 2% increase while other prominent firms such as Microsoft, Meta Platforms, and Amazon also posted gains. In contrast, Apple reported a slight decline of about 0.5% as expectations build for a significant product launch later in the day, including the anticipated iPhone 16.

The semiconductor sector showed strength, with the VanEck Semiconductor ETF climbing by 1%. Key players in the industry, such as Arm Holdings, Qualcomm, and Intel, advanced in early trading, reflecting overall positive sentiment in the market.

Boeing emerged as a notable gainer, with shares rising by 3.5% after the aircraft manufacturer announced a tentative agreement with two of its unions, potentially averting a strike. Additionally, shares of Palantir and Dell surged by 12% and 4% respectively following their forthcoming inclusion in the S&P 500 index.

The economic calendar on Monday appeared light, but anticipation builds for crucial inflation data to be released later in the week. This data will be vital for the Federal Reserve as it deliberates the possibility of lowering the fed funds rate for the first time in four years.

Market observers currently estimate a 27% chance of a half-percentage-point rate cut in the upcoming Federal Reserve meeting on September 18, according to the CME Group’s FedWatch tool. This probability had briefly risen to over 50% following last Friday’s underwhelming employment report.

In bond markets, the yield on 10-year Treasuries remained relatively unchanged at around 3.72%. Following the jobs report, yields had dropped to their lowest level in over a year, reaching 3.65%.

In other commodities, gold futures showed slight gains, hovering around $2,530 an ounce, while the value of bitcoin also ticked upwards to approximately $55,500.