Stock Market Today: Dow Wavered, Oil Prices Slipped After Weak Chinese Data

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The stock market was mostly lower Monday, as investors digested a rally to close out last week. Markets are awaiting economic data out Tuesday. 

The

Dow Jones Industrial Average
closed up 27 points, or 0.1%. The

S&P 500
dropped 0.4%, while the technology stock-heavy

Nasdaq Composite
fell 1.2%. While the Dow rose a tick, most stocks fell. The

Invesco S&P 500 Equal Weight
Exchange-Traded Fund (RSP), which weights each stock in the index equally and therefore shows the breadth of stocks rising or falling, declined 0.3%. 

With not many new developments impacting the stock market Monday, there is “some of the worst sentiment we have ever seen,” wrote NatAlliance Securities’ Andrew Brenner.

All three major indexes posted big gains from a low point on Thursday afternoon to the close on Friday, with the Nasdaq up nearly 6% during that period. Federal Reserve Chairman Jerome Powell implied in a media interview Thursday that the central bank won’t lift interest rates by three quarters of a percentage point to combat high inflation, but rather by half a point in each of the next two meetings. That put the stock market—wary that higher rates will slow down the economy—at ease. 

Markets are still trying to discern by how much economic growth could drop and how much more interest rates across the board will rise.

“Monetary tightening typically hits the real economy with a lag of 6 to 24 months,” wrote Seema Shah, chief strategist at Principal Global Investors, a dynamic consistent with the fact that the stock market is having trouble seeing sustained gains.

Now, traders are bracing for a round of economic data that could provide hints about inflation and the Fed’s next move. Tuesday, retail sales will hit the wires, and economists are expecting a gain of 1.1% month-over-month. But if too much of any increase in retail sales is driven by price increases—or inflation—markets may get nervous that the Fed will become more hawkish, or aggressive in lifting interest rates.

Industrial production also comes out Tuesday, with economists looking for a month-over-month increase of 0.5%. 

“Market concern is rising about downside risks to activity meaning metrics like industrial production and retail sales, both out this week, take on some increased significance,” wrote Citigroup economist Andrew Hollenhorst.

Overall, something needs to happen to “make the Fed less hawkish, which is what we need to help form a sustainable [market] bottom,” wrote Tom Essaye, founder of Sevens Report Research. 

But while the stock market didn’t perform well Monday, it’s hanging onto a decent gain since Thursday. The S&P 500 is still up 3.8% from its low point that day — and it is far from wiping away all of those gains. That means there are still some buyers, even at higher price levels, which could signal that the market is stabilizing. “If you can stay even and have an equilibrium, if you have a day like today that’s a digestion day, that’s a victory for the bulls,” said Keith Lerner, co-chief invent officer at Truist. 

Overseas, the pan-European

Stoxx 600
was flat, and the

Shanghai Composite
lost 0.3%.

Here are seven stocks on the move Monday:

Spirit Airlines

(ticker: SAVE) surged 14% after

JetBlue Airways

(JBLU) launched a hostile takeover of the discount airline. Spirit rejected its previous $3.6 billion takeover proposal earlier this month in favor of a lower-priced deal from

Frontier Group

(ULCC). JetBlue stock lost 6.1%, while Frontier Group Holdings gained 5.9%.

McDonald’s

(MCD) stock was 0.1% lower after the fast food giant said it would pull out of Russia 30 years after entering the country.

Shake Shack

(SHAK) stock fell 3.9% even after getting upgraded to Buy from Neutral at Northcoast. 

Netflix

(NFLX) stock initially rose, then fell 0.6% after getting upgraded to Outperform from Neutral at Wedbush. 

SoFi Technologies

(SOFI) stock rose 2.4% after getting upgraded to Overweight from Neutral at Piper Sandler. 

Write to Jacob Sonenshine at jacob.so[email protected] and Jack Denton at [email protected]