Key facts
- U.S. stock indexes opened little changed Monday.
- Investors are monitoring Middle East developments, particularly concerning the Strait of Hormuz.
- Key U.S. inflation data, including consumer and producer prices, are due this week.
- The Dow Jones Industrial Average rose 35.7 points, or 0.07%, at the open.
- The S&P 500 fell 5.9 points, or 0.08%, at the open.
- The Nasdaq Composite dropped 10.2 points, or 0.04%, at the opening bell.
U.S. stock indexes opened little changed on Monday as investors weighed developments in the Middle East concerning the Strait of Hormuz and braced for a week filled with significant inflation data and corporate earnings reports. Iran indicated it was nearing a final agreement with Oman to define new shipping lanes through the strait, while also stating that the U.S. must meet certain conditions for the waterway to reopen. A potential easing of energy flows through this critical chokepoint could alleviate concerns about elevated oil prices, which have contributed to inflation worries and expectations of interest rate hikes by central banks globally.
Upcoming readings of consumer and producer prices are anticipated to provide key insights into the Federal Reserve's monetary policy direction. Traders are now pricing in a 44% probability of a rate increase in September, according to the CME FedWatch tool. Comments from Cleveland Fed President Beth Hammack were expected later in the day.
In premarket trading, Dow E-minis were down 72 points (0.13%), S&P 500 E-minis were down 5.25 points (0.07%), and Nasdaq 100 E-minis were down 43 points (0.14%). The S&P 500 closed at a record high on Friday, and the Dow Jones Industrial Average reached record levels last week. J.P.Morgan has raised its year-end target for the S&P 500 to 8,000 from 7,800.
Separately, the U.S. Senate passed a short-term bill on Saturday to fund federal agencies through December 11, averting a government shutdown. Brent crude rose 1.4% to $84.68 per barrel, and U.S. benchmark crude advanced 1.4% to $79.30 per barrel. Global markets showed mixed performance, with shares mostly higher in Europe and Asia, led by Japan's Nikkei 225. The U.S. dollar strengthened to 158.80 Japanese yen from 157.72 yen, while the euro declined to $1.1552 from $1.1561.