Wall Street hovered near record levels on Monday as investors awaited the latest Wall Street inflation update from the U.S. government. The S&P 500 remained little changed in early trading, staying close to its all-time high from two weeks ago. The Dow Jones Industrial Average added 39 points, while the Nasdaq Composite dipped 0.2% after recently setting its own record.
Key Inflation Data Ahead
The focal point for Wall Street this week is Tuesday’s inflation report for July. This Wall Street inflation update is expected to provide critical insights into price pressures and help shape expectations for Federal Reserve policy. If inflation comes in higher than expected, it could raise concerns about future interest rate cuts.
Global Markets React to Trade and Oil Developments
European markets were mixed, with Germany’s DAX slipping 0.1% to 24,127.50 and France’s CAC 40 down 0.2% to 7,728.58. Britain’s FTSE 100 edged up 0.2% to 9,114.27. In Asia, Hong Kong’s Hang Seng rose 0.2% to 24,906.81, and the Shanghai Composite gained 0.3% to 3,647.55.
Investors were also watching trade developments as U.S. President Donald Trump’s deadline for raising tariffs on Chinese goods approached. Talks have been ongoing, but no clear decision has been announced on whether the current truce will be extended.
Oil prices continued their decline, with U.S. benchmark crude falling 16 cents to $63.72 per barrel and Brent crude dropping 9 cents to $66.50. Increased output from OPEC+ members and hopes for progress in the Ukraine conflict contributed to the downward pressure.
Semiconductor Sector Under the Spotlight
Taiwan’s TSMC (NYSE:TSM), the world’s largest contract chipmaker, rose 0.4% and served as a bellwether for U.S. tech stocks like Nvidia (NASDAQ:NVDA) and Advanced Micro Devices (NASDAQ:AMD). Unconfirmed reports suggested these companies may agree to give the U.S. government a 15% share of revenue from AI chip sales to China, after recent easing of export restrictions.
In pre-market trading Monday, Nvidia was down 0.6% and AMD slipped 1.7%. Despite these moves, both stocks remain key players in the AI-driven semiconductor boom.
Strong Earnings Continue but Risks Remain
Recent earnings from major companies have largely exceeded expectations. Nvidia rose 1.1% and Apple (NASDAQ:AAPL) gained 4.2% in the last session. Gilead Sciences (NASDAQ:GILD) jumped 8.3% after beating forecasts and raising its annual guidance. Expedia Group (NASDAQ:EXPE) rose 4.1% on strong quarterly results.
However, some entertainment stocks struggled. Paramount Skydance fell 10.5% just one day after its $8 billion merger closed, while Warner Bros. Discovery (NASDAQ:WBD) dropped 8%.
Interest Rates, Inflation, and Investor Sentiment
Lower interest rates can boost both the economy and stock prices, but they also risk pushing inflation higher. This week’s Wall Street inflation update could influence whether the Fed leans toward further rate cuts or adopts a more cautious approach.
Concerns about inflation are being weighed against signs of a softening labor market, which could encourage more accommodative monetary policy. Retail sales data later this week will offer additional clues about consumer spending strength.
Currency and Commodities Update
The U.S. dollar strengthened slightly to 147.69 Japanese yen, while the euro slipped to $1.1641. Commodity traders remained cautious, with oil prices under pressure and metals markets awaiting new trade and inflation signals.
If the inflation report aligns with expectations, Wall Street may continue its steady climb. But a surprise—either higher or lower—could spark sharp moves across stocks, bonds, and currencies as investors reposition ahead of the Fed’s next decision.
Featured Image – Depositphotos
