S&P 500 falls as investors await key inflation data

The S&P 500 slipped on Monday as the broad market index retreated from its record notched last Friday and investors awaited key inflation data.

The S&P 500 fell 0.38 per cent to 5,069.53. The Nasdaq Composite declined 0.13 per cent to close at 15,976.25. The Dow Jones Industrial Average slipped 62.30 points, or 0.16 per cent to close at 39,069.23.

Amazon joined the 30-stock Dow on Monday, replacing Walgreens Boots Alliance. The Dow Jones Indices opened the door to Amazon’s inclusion in the Dow and Walgreens’ exit to rebalance the index in light of a 3-for-1 stock split by another Dow company, Walmart. The Dow’s holdings are weighted according to stock price, not market cap. The addition of the e-commerce giant will increase the index’s exposure to tech and consumer retail. Amazon shares fell 0.15 per cent.

Treasury yields climbed higher Monday, providing another dent to the equity market. The 10-year Treasury yield was last higher by around 4 basis points to 4.276 per cent.

Stocks are coming into the final week of February on a high note after the major indexes achieved key milestones and registered winning weeks with help from Nvidia’s blockbuster earnings.

Investors are now watching whether the AI momentum can last as economic and inflation risks linger. With that in mind, they’re also looking ahead to the monthly personal consumption expenditures price index, the Fed’s favoured inflation gauge due out Thursday.

For the time being, the AI-powered rally appears sustainable, according to Alex McGrath, chief investment officer at NorthEnd Private Wealth.

New home sales in January came in below economists’ estimates as mortgage interest rates remained elevated. Sales of new single-family homes came in at 661,000 for the month, an increase of 1.5 per cent, according to seasonally adjusted numbers the Census Bureau and Department of Housing and Urban Development released Monday. The total missed the Dow Jones estimate for 680,000 and 2.4 per cent, respectively.

There’s a raft of economic releases on deck, including January durable orders data on Tuesday and January wholesale inventories on Wednesday. Consumer spending and PCE numbers will come out on Thursday.

In commodity-related news, iron ore prices hit a four-month low on Monday due to increased inventories in China and slowed construction activity caused by adverse weather. Factors including rising port inventories and eased supply concerns contributed to the decline, alongside sluggish construction and bearish steel fundamentals in China. Vale, the world’s second-largest iron ore producer, reportedly said it’s seeking to increase its sales outside of China, an indication that miners aren’t optimistic about a revival.

Turning to US sectors, only three closed higher overnight. Energy was the best performer, and Utilities were the worst.

Looking ahead to the Australian landscape, on Tuesday, the companies expected to report include Abacus, Altium, Alumina, Appen, Chorus, Coles, City Chic, Cooper Energy, E&P, G8 Education, Keypath Education, Light & Wonder, Prospa, Siteminder, Tyro Payments, Woodside, and Zip Co.

Futures

The SPI futures are pointing to a 0.05 per cent fall.

Currency

One Australian dollar at 8.40am was buying 65.39 US cents.

Commodities

Gold lost 0.41 per cent. Silver dropped 1.96 per cent. Copper lost 1.65 per cent. Oil added 1.40 per cent.

Figures around the globe

European markets closed mixed. London’s FTSE fell 0.29 per cent, Frankfurt added 0.02 per cent, and Paris lost 0.46 per cent.

Turning to Asian markets, Tokyo’s Nikkei added 0.35 per cent, Hong Kong’s Hang Seng fell 0.54 per cent and China’s Shanghai Composite lost 0.93 per cent..

Yesterday, the Australian share market closed 0.12 per cent higher at 7,652.84.

Ex-dividends
Amcor PLC (ASX:AMC) is paying 18.98 cents unfranked
BSP Financial Group (ASX:BFL) is paying 36.4135 cents unfranked
Bega Cheese Ltd (ASX:BGA) is paying 4 cents fully franked
Evolution Mining Ltd (ASX:EVN) is paying 2 cents fully franked
IPH Limited (ASX:IPH) is paying 16 cents 35 per cent franked
MA Financial Group (ASX:MAF) is paying 14 cents fully franked
Morphic Ethical Equities Fund (ASX:MEC) is paying 3.5 cents fully franked
Peter Warren (ASX:PWR) is paying 8.5 cents fully franked
TABCORP Holdings Ltd (ASX:TAH) is paying 1 cent fully franked

Dividends payable
GQG Partners Inc (ASX:GQG)

Sources: Bloomberg, FactSet, IRESS, TradingView, UBS, Bourse Data, Trading Economics, CoinMarketCap.

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