U.S. stocks struggled for direction Monday, kicking off August on an ambivalent note after the biggest monthly gains since November 2020 for the S&P 500 left investors to debate whether gains mark a bottom or merely a bear-market bounce from the June lows.What’s happening
The Dow Jones Industrial Average
DJIA,
+0.21%
rose 35 points, or 0.1%, to 32,881.
The S&P 500
SPX,
+0.12%
was up 5 points, or 0.1%, at 4,135.
The Nasdaq Composite
COMP,
+0.53%
ticked 74 points up, or 0.6%, to 12,464.
Stocks ended sharply higher on Friday, leaving the Dow up 6.7% for the month, while the S&P 500 saw a 9.1% July jump, the biggest monthly gains for both since November 2020. The Nasdaq surged 12.3% for its best monthly performance since April 2020 and its strongest July on record, according to Dow Jones Market Data.
What’s driving the market Stocks erased early losses to trade into positive territory after the Institute for Supply Management reported that its closely followed manufacturing gauge dipped to 52.8% in July from a reading of 53% a month earlier. Economists polled by The Wall Street Journal forecast the index to total 52.1%. While any number above 50% signifies growth, the latest reading was the weakest since June 2020. Big gains for stock indexes last week capped a strong July bounce fueled by earnings that have so far been better than feared. Investors also cheered what they saw as signals the Federal Reserve might not have to raise rates as aggressively as previously expected as the economy slows. “In equity markets, there were few signs of caution about how Fed speakers and the upcoming data might affect the narrative as generally impressive earnings results in both America and Europe gave the bulls the upper hand, while the retreat in yields provided additional support,” said Raffi Boyadjian, lead investment analyst at XM, in a note. Need to Know: FAANGs ain’t what they used to be, so beware the bear-market bounce says this hedge-fund manager On Friday, data showed that higher gasoline prices led the personal-consumption-expenditures price index up 1% in June, exceeding forecasts of 0.9%. June inflation measured by the PCE index showed the cost of living over the past year climbed 6.8%, the highest rate since January 1982. Last Wednesday, the Fed ended its two-day policy meeting with another 75-basis-point rate hike in an effort to curb soaring inflation. Fed Chair Jerome Powell said last week that another 75 basis-point move could be considered in …