Markets rise to start a week thick with inflation updates and retail earnings

Premarket trading is relatively quiet ahead of the release of new U.S inflation data and the beginning of the earnings season for some of the world's biggest retailers.

Futures for the S&P 500 and Nasdaq rose more than 0.3% higher before the bell, while futures for the Dow Jones Industrial Average gained about 0.2%.

Key Corp. jumped more than 20% after the regional bank announced a $2.8 billion investment from the Bank of Nova Scotia. The Cleveland bank said the cash influx will allow it to drive further growth in its investment banking and wealth management businesses.

New data on U.S. inflation at the consumer and wholesale level will be released this week, along with more insights into how U.S. retailers fared last month. Walmart and Home Depot kick of the earnings season for retailers, with the latter posting second quarter results on Tuesday.

Retailers have largely topped performance expectations this year, but there are signs that millions of Americans are pulling back on spending after an extended period of inflation. Still, economists believe there is some growth in sales after they stalled in June.

The U.S. releases figures on inflation at the producer level Tuesday, prices before they reach the consumer, and posts consumer inflation numbers on Wednesday.

Inflation has been the leading economic concern for more than two years, but price gains have returned to more reasonable levels and most economists, as well as investors, expect the Federal Reserve to begin cutting interest rates next month, excluding any big surprises this week. The Fed cranked up rates beginning in March of 2022 in an effort to stymie inflation that began to rise as the economy recovered from a pandemic-induced recession.

Worries remain about the strength of the U.S. economy. That dragged Treasury yields lower Friday as investors sought safer places for their money and expectations built for deeper cuts to interest rates coming from the Federal Reserve. The yield on the 10-year Treasury stabilized Monday at 3.95% after falling to 3.94% from 3.99% on Friday.

“Market pricing suggests that traders remain nervous about the steady-as-she-goes assessment of policy rates, and the volatility of last week perhaps serves as a warning that we could be only one or two bad prints away from further turmoil,” Benjamin Picton, a senior market strategist at Rabobank, said in a report.

Last week started with a jolt, as markets were slammed with heavy selling triggered by concerns over whether the U.S. economy may be slowing too quickly. Japanese stocks endured their worst percentage loss since 1987's Black Monday. But it ended on a calmer note after more big U.S. companies joined those reporting better profit for the spring than analysts had expected.

“The recent run in stronger-than-expected U.S. economic data has aided to push back against recession concerns, with rate expectations now suggesting that the U.S. Federal Reserve (Fed) may retain more flexibility in its policy easing process as compared to one that is being forced by higher economic risks,” Yeap Jun Rong of IG said in a commentary.

In Europe at midday, Germany's DAX gained 0.2%, London's FTSE picked up 0.4% while the CAC 40 in Paris edged 0.1% lower.

In Asian trading on Monday, Hong Kong's Hang Seng edged 0.1% higher, to 17,111.65 and the Shanghai Composite index slipped 0.1% to 2,858.20.

Markets in Tokyo and Bangkok were closed for holidays.

In Seoul, the Kospi jumped 1.2% to 2,618.30, as shares in Samsung Electronics gained 1.1%, tracking advances in Big Tech companies late last week. Taiwan's Taiex advanced 1.4%, as computer chip giant Taiwan Semiconductor Manufacturing Co. added 0.6% and electronics maker Hon Hai Precision Electronics, also known as Foxconn, surged 4.5%.

Australia's S&P/ASX 200 rose 0.5% to 7,813.70.

In other dealings early Monday, U.S. benchmark crude oil rebounded, gaining 82 cents to $77.66 per barrel in electronic trading on the New York Mercantile Exchange. Brent crude, the international standard, rose 69 cents to $80.35 per barrel.

The U.S. dollar rose to 147.59 Japanese yen from 146.63 yen. The euro climbed to $1.0923 from $1.0919.

On Friday, the S&P 500 rose 0.5%, coming off its best day since 2022 and trimming its loss after the week's wild ride to less than 0.1%.

The Dow Jones Industrial Average rose 0.1% and the Nasdaq composite added 0.5% to finish what was a wild week.

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