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The major market averages pared back earlier gains on Monday following an indication that Americans are expecting stickier inflation.
The Nasdaq Composite (COMP:IND) was +0.1%, the S&P 500 (SP500) was -0.1%, and the Dow (DJI) was -0.2%.
The Federal Reserve Bank of New York’s April Survey of Consumer Expectations showed that median inflation expectation jumped to 3.3% from 3.0% for the one-year ahead timeframe, its highest reading year-to-date, but below the 12-month trailing average of 3.5%.
That was a little inflation data amuse bouche ahead of the April PPI appetizer on Tuesday and Wednesday’s CPI main course.
Rates ticked down. The 10-year Treasury yield (US10Y) was lower by 2 basis points to 4.47% and the 2-year yield (US2Y) fell 2 basis points to 4.85%.
Meanwhile, the market was seeing echoes of the 2021 meme stock craze as shares of GameStop (GME) rose more than 70% at one point following the return of Roaring Kitty.
“The main thing that will light up the skies for markets this week will be US inflation data with April’s PPI (Tuesday) and CPI (Wednesday) the highlights,” Deutsche Bank’s Jim Reid said. “We’ll see if the higher-than-expected US inflation seen in Q1 extends into Q2 or not.”
“Markets will also hear from Powell (tomorrow) and Vice Chair Jefferson (today) as the highlights of a busy Fedspeak calendar that are included in the day-by-day list at the end. The next most important US data release is Retail Sales on Wednesday.”
