By Damian J. Troise and Alex Veiga
Stocks on Wall Street gave up early gains and closed slightly lower Monday as investors began another busy week of company earnings and economic reports.
The S&P 500 gave up an early gain to end down 0.3%. The Dow Jones Industrial Average dipped 0.1% and the Nasdaq fell 0.2%. Smaller company stocks also gave back some of their recent gains, nudging the Russell 2000 0.1% lower.
Bond yields mostly fell. The yield on the 10-year Treasury, which influences mortgage rates, fell to 2.60% from 2.65% late Friday.
August’s subdued opening follows a solid rally for stocks last month: July was the best month for the S&P 500 index since November 2020. But this week's array of economic reports and company earnings has left traders “a little cautious,” said Lindsey Bell, chief markets and money strategist at Ally Invest.
"Investors are still assessing where we break from here – further to the upside or reverse course,” Bell said.
The benchmark S&P 500 index fell 11.66 points to 4,118.63. It's coming off a 9.1% gain in July, but remains down 13.6% for the year.
The Dow lost 46.73 points to close at 32,798.40, while the Nasdaq slid 21.71 points to 12,368.98. The Russell 2000 ended down 1.92 points at 1,883.31.
Banks, health care companies and tech stocks were among the biggest weights on the S&P 500. JPMorgan Chase fell 1%, UnitedHealth Group dropped 1.3% and Intuit slid 1.7%.
U.S. crude oil prices fell 4.8%, dragging energy stocks lower. Exxon Mobil lost 2.5%.
Those losses outweighed solid gains by retailers and consumer products makers. Target rose 1.3% and Procter & Gamble rose 2.9%.
Boeing jumped 6.1% for the biggest gain in the S&P 500 after it cleared a key hurdle with federal regulators and could soon resume deliveries of its large 787 airliner.
Stocks have been falling for much of the year as investors worry about high inflation and rising interest rates. A key concern remains whether central banks will raise interest rates too aggressively and push economies into a recession.
The Federal Reserve raised its key short-term interest rate by 0.75 percentage points on Wednesday, lifting it to the highest level since 2018. The goal is to slow the U.S. economy to help temper the impact from inflation. An inflation gauge that is closely tracked by the Fed jumped 6.8% in June from a year ago, the biggest increase in four decades.
A surge in oil prices throughout the year only worsened the impact from inflation. U.S. crude oil prices are up roughly 25% in 2022 and that has raised gasoline prices in the U.S. to record levels.
A report last week showed that the U.S. economy contracted last quarter and could be in a recession. Stocks' recent rally came as worrisome economic reports gave some investors confidence that the Fed can dial back its aggressive pace of rate hikes sooner than expected.
Several big companies are reporting earnings this week, which will give investors insight into how inflation is impacting businesses and consumers. Construction equipment maker Caterpillar and coffee chain Starbucks report earnings on Tuesday. Pharmacy chain CVS reports earnings on Wednesday.
More than half of the companies in the S&P 500 have reported their latest earnings results, which have been mostly better than expected. Many companies have also warned that inflation is hurting consumer spending and squeezing operations. Businesses have been increasing prices in an effort to keep up profits.
Wall Street will also get several updates on the job market, which has remained strong. The Labor Department will release its June survey on job openings and labor turnover on Tuesday and its closely-watched monthly employment report for July on Friday.
Updated on August 1, 2022, at 4:57p.m. ET.