U.S. stocks firmed Monday as oil prices rose and investors await inflation and retail sales data due later this week.
Many Wall Street strategists have said in recent days that the market is poised for a correction, after doubling from its March 2020 trough. But others maintain that strong earnings growth and low interest rates will continue to push equities higher.
Concern remains about delta-variant coronavirus infections and about the timing of stimulus withdrawal by the world’s major central banks.
The European Central Bank has offered a partial tapering of its bond purchases, while boosting growth forecasts. So many investors are looking at an autumn glide path for stocks based on a similar move by the Federal Reserve later this month.
Much could depend on consumer price data due Tuesday and retail sales data due Thursday.
In Washington, House Democrats have drafted plans to raise taxes to pay for President Joe Biden’s ambitious $3.5 trillion spending ambitions. They are taking aim at corporate levies and capital gains.
But the levels will likely fall far shy of the president’s targets, underscoring the difficulty his economic agenda faces in a House with only a narrow Democratic majority.
Video: The U.S. dollar will continue to grind higher, says RBC Capital (CNBC)
Tech stocks are in focus again Monday, following yet another crackdown on internet giants in China. Officials there are demanding that companies stop blocking links to their rivals. And there are reports the government plans to break up Ant Group’s popular payment app, Alipay.
Ant Group parent Alibaba’s BABA U.S.-listed shares fell 0.8%, while Tencent TECHY slid 1%.
As for stock indices, the S&P 500 gained 0.9%, the Dow Jones Industrial Average 0.6% and the Nasdaq Composite 0.01%.
Energy stocks led the gains, as the price of oil climbed 1%. Traders continue to factor in the impact of a delayed return to full capacity for drilling installations in the Gulf of Mexico following damage from Hurricane Ida.
Exxon Mobil gained 3% and Chevron 2%.
Apple rebounded 0.4% from Friday’s 3.3% slump, the biggest in four months. Investors see mixed ramifications from Friday’s court ruling about Apple’s app platform. And they await the tech giant’s ‘California Streaming’ iPhone launch event Tuesday.
The stock also got a buy-rating boost from Citigroup, with a $170 price target, from the highly regarded analyst Jim Suva.
Virgin Galactic SPCE shares fell 3%, after entrepreneur Richard Branson’s space venture delayed a planned research mission with the Italian air force until mid-October.
Overseas, Europe’s Stoxx 600 firmed 0.3%, also paced by energy stocks, ahead of August inflation data later this week.
In Asia, China’s big tech crackdown shaved 0.44% from the CSI 300, pulling the regionwide MSCI ex-Japan 0.72% lower.
Hopes of more stimulus from Japan’s pending elections lifted the Nikkei 225 another 0.22% to 30,447.37 points, its highest since early 1990.
This article was originally published by TheStreet.