Traders work on the floor of the New York Stock Exchange during morning trading on June 23, 2025 in New York City.
Michael M. Santiago | Getty Images News | Getty Images
Stocks fell Monday as traders braced for key U.S. inflation reports due out later in the week and largely ignored a positive development in the tariff saga.
The Dow Jones Industrial Average slipped 200.52 points, or 0.45%, and settled at 43,975.09. The S&P 500 lost 0.25% to close at 6,373.45, and the Nasdaq Composite was off 0.3% and ended at 21,385.40.
Inflation readings this week will prove a key hurdle for a broad market index near record highs. The consumer price index, which is set to be released Tuesday, and the producer price index, due out Thursday, will be critical in shaping the outlook for the direction of interest rates, especially for the Federal Reserve’s September meeting. Hotter inflation prints could hinder the market’s advance.
Economists are forecasting the July CPI will show a 0.2% increase month-over-month and a 2.8% increase annually, according to estimates from Dow Jones. Core CPI — which excludes volatile food and energy prices — is expected to rise 0.3% on a monthly basis and 3.1% yearly, up from June’s respective levels of 0.2% and 2.9%.
The inflation data comes ahead of the Fed’s Jackson Hole meeting in Wyoming on Aug. 21-23, which could set the tone for the September meeting. While the market is now pricing in an 87% chance of a rate cut next month, CFRA Research’s Sam Stovall told CNBC that investors may be getting ahead of themselves.
“I’m getting a little concerned that the market is going to end up being disappointed,” the firm’s chief investment strategist said. “The Fed will have a conundrum to deal with if inflation remains sticky and if the consumer remains willing to spend — where is the need to cut rates?”
Investors were left underwhelmed on Monday after President Donald Trump signed an executive order that extended the deadline for tariffs on Chinese goods by another 90 days. The president signed the order hours before midnight, when the previous pause set in place was due to expire.
