U.S. stocks struggled for direction as investors mulled the Federal Reserve’s path of interest-rate hikes after hawkish comments from central bank Governor Christopher Waller.
Traders are awaiting comments from Fed Vice Chair Lael Brainard, who is set to discuss the economy outlook at an event hosted by Bloomberg News in Washington.
The S&P 500 swung between modest gains and losses.
The tech-heavy Nasdaq 100, which is typically more sensitive to interest rates, fell as much as 1.3% before paring declines.
It was dragged by losses in Microsoft, Amazon.com and Apple.
The dollar turned higher after weekend comments from Waller that policymakers had “a ways to go” before ending interest-rate hikes.
Treasury yields rose, with the 10-year rate hovering around 3.88%.
Signs of cooling in U.S. inflation and the prospects of a dovish tilt by the Fed had propelled the S&P 500 to its best week since June.
But some of the world’s largest money managers are still clinging to risk-off positioning against the threat of entrenched inflation.
JPMorgan Asset Management has a record allocation in cash in at least one of its strategies while a hedge fund solutions team at UBS Group is staying defensive.
“Even the biggest bull would have to say that investors need to be careful about extrapolating last week’s slightly better CPI number into something that is giving investors definitive proof that the inflation is about to decline in a substantial manner over the coming weeks and months,” Matt Maley, chief market strategist at Miller Tabak + Co., wrote.
Meanwhile, Chinese stocks listed in the U.S. are on track to extend their rally to a third day, after Joe Biden and Xi Jinping called for reduced tensions between the world’s two biggest economies during a meeting in Bali, Indonesia.
The White House said in a statement afterward that Secretary of State Antony Blinken would travel to China.
Cryptocurrencies rose on plans by Binance Holdings to set up a recovery fund to stabilize the industry after FTX’s bankruptcy sparked market-wide losses of around $200 billion in the past week.
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