TLDR
- S&P 500 fell 0.1% from Friday’s record, while the Nasdaq declined 0.3% during Monday’s session.
- Brent crude climbed 5% to $87.72 as uncertainty over Strait of Hormuz reopening continued.
- Investors are awaiting July inflation data that could influence expectations for September Federal Reserve policy.
- CME Group data showed traders pricing nearly 52% odds of a September Federal Reserve rate increase.
- Berkshire Hathaway gained 1.5% after reporting stronger quarterly profit and stock purchases under CEO Greg Abel.
US stocks pulled back from record levels on Monday as rising oil prices added pressure to markets and investors awaited fresh inflation data that could influence the Federal Reserve’s next rate decision.
The S&P 500 fell 0.1% after reaching a record close on Friday. The Dow Jones Industrial Average declined 60.95 points, or 0.1%, while the Nasdaq Composite dropped 0.3% as investors assessed corporate earnings, oil prices and interest rate expectations.
S&P 500 Pulls Back From Record High
The S&P 500 ended the session at 7,753.11, down 4.53 points. The Dow finished at 53,975.98 after losing 60.95 points, while the Nasdaq Composite fell 85.26 points to 26,605.36.
Stock market momentum slowed after a strong rally supported by corporate earnings. FactSet estimates indicate that earnings per share for S&P 500 companies could rise about 50% from a year earlier during the spring quarter, which would mark the strongest annual growth in about five years.
Berkshire Hathaway gained 1.5% after reporting stronger quarterly profit than analysts had expected. The company also disclosed that it had used part of its large cash holdings to buy stocks under new Chief Executive Greg Abel.
MarineMax surged 46.1% after agreeing to be acquired for about $1.5 billion in cash by a Blackstone portfolio company. Varex Imaging jumped 48.8% after Teledyne Technologies agreed to acquire the company for $18.90 per share in cash.
Intel moved in the opposite direction, falling 4.1% after saying it could sell $15 billion of stock. The company said proceeds could support investments linked to rising demand for artificial intelligence technology.
Oil Prices Rise 5% on Strait of Hormuz Uncertainty
Brent crude gained 5% to $87.72 per barrel as uncertainty over the reopening of the Strait of Hormuz continued to affect oil markets. The key shipping route is important for global crude supplies, and restrictions on tanker movements have kept energy traders focused on developments in the region.
Brent prices have moved sharply in recent weeks as expectations around a possible agreement between the United States and Iran changed. The contract traded between about $72 and $102 last month before returning to levels seen earlier in August.
Higher oil prices can add to inflation pressure by increasing energy costs across the economy. Markets are now focused on Wednesday’s U.S. inflation report, with economists expecting annual inflation to slow to 3.4% from 3.5% in June.
Fed Rate Expectations Remain in Focus
Federal Reserve policy remains a key market concern as investors assess whether inflation and economic data could affect the path of interest rates. A weaker U.S. jobs report released Friday reduced expectations for a near-term rate increase.
CME Group data showed traders still placed the probability of a September rate increase at nearly 52%. Higher rates can raise borrowing costs for households and companies while affecting valuations across financial markets.
The 10-year U.S. Treasury yield increased to 4.70% from 4.65% on Friday. The yield remains well above its pre-war level of 3.97%, with higher borrowing costs already affecting mortgages and other loans.
European markets traded mixed on Monday, while several Asian markets advanced. Japan’s Nikkei 225 gained 2.1% as global investors continued to assess energy prices, inflation data and monetary policy expectations.
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