Wall Street Surges and Plunges Amid Economic Data Anticipation

Wall Street stocks ended mixed as investors awaited critical U.S. economic data this week, particularly consumer prices. The Dow fell, while the S&P 500 and Nasdaq saw upticks. Investor focus remains on U.S. CPI readings and retail earnings, amidst mixed outlooks on Federal Reserve policy and economic health.

Wall Street stocks concluded Monday's trading session with a mixed performance as investors braced themselves for a cascade of U.S. economic data set to be unveiled this week. Key among these will be consumer price data, crucial for assessing the Federal Reserve's monetary policy outlook.

The Dow Jones Industrial Average recorded losses, while the benchmark S&P 500 Index and tech-centric Nasdaq Composite Index managed to close higher. Conversely, the Russell 2000 Index, which emphasizes small companies, dropped by 0.9%.

James Abate, chief investment officer at Centre Asset Management in New York, noted the market's recent pivot away from small-cap companies like those in the Russell 2000. "We don't have a broadening and expanding economy that will support broader growth and stock price appreciation," Abate emphasized.

All eyes are set on Wednesday's U.S. consumer price index (CPI) reading and upcoming retail earnings reports, which will provide crucial insights into consumer demand. The CPI is anticipated to show a 0.2% month-on-month increase for July, remaining consistent at 3% year-on-year.

Money markets are currently split on whether the Federal Reserve will opt for a 25- or 50-basis-point interest rate cut in September, expecting up to a total 100 bps reduction by the end of 2024, according to CME's FedWatch Tool. Investors will also closely monitor July's retail sales figures set for release on Thursday, which are expected to show only marginal growth.

Market participants are particularly attentive to retailer earnings from Walmart and Home Depot later this week. Abate warned that a higher-than-expected CPI could disappoint the market. Meanwhile, Starbucks surged 2.58% following activist investor Starboard Value's reported push for the company to boost its stock price.

KeyCorp shares soared 9.1% after Canada's Scotiabank acquired a minority stake in the U.S. regional lender. In contrast, Hawaiian Electric plummeted 14.45% amid concerns about its future viability. On the NYSE, declining issues outnumbered advancers by a 1.46-to-1 ratio, while on the Nasdaq, the ratio stood at 1.54-to-1.

(With inputs from agencies.)