Stocks mixed amid lingering inflation concerns, S&P 500 hovers near record high
Stock futures opened near the flat line on Monday evening after a meandering session during the regular trading day.
Contracts on the S&P 500 rose. Previously, the index ended just a tick below the flatline and was less than half a percent below its all-time high. The Dow also ended lower while the Nasdaq moved into positive territory.
Investors this week processed signals from officials about the further path of monetary and fiscal policy and what this could mean for interest rates and corporate profits. According to an interview with Bloomberg, Treasury Secretary Janet Yellen said over the weekend that higher interest rates "would actually be a plus for society and the Fed".
Traders, however, were less convinced. The prospect of higher interest rates could weigh on stock valuations, and additional corporate tax reforms could further detract from big corporate profits. Amazon (AMZN) stocks fell Monday after a report that Group of Seven Treasury Ministers wanted to include the e-commerce giant in a new global tax proposal. And investors continue to watch President Joe Biden and members of Congress negotiate his multi-trillion-dollar infrastructure proposal, which would likely be funded in part by corporate tax increases.
However, some strategists suggested that investor concerns about the inflation and tax reform headlines may be exaggerated as a solid backdrop for economic growth could help offset some of the interest rate or political headwinds.
"We think investors are getting a little too pessimistic about the outlook amid inflation concerns and the increasing tax environment," Jon Adams, strategist at BMO Global Asset Management, told Yahoo Finance. "The background of a very supportive political environment, an improving economy and very strong earnings momentum mean that stocks can really expect growth on their way into the second half of the year."
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“We prefer to position investors toward value with an inclination there, an inclination towards small caps. We believe these areas of the stock spectrum do well in times of rising inflation, ”he added. "We believe stocks are a pretty good hedge against potentially higher inflation, and given the headlines over the past week or so, we're not concerned about the corporate tax environment."
On Tuesday, investors will receive new economic data in the form of April's job vacancy and labor turnover survey. Job vacancies are expected to hit a new record high during the month, rising to 8.2 million from 8.123 million in March as employers seek to bring increasing numbers of workers back to pace with demand during the recovery to keep.
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6:10 p.m. ET Monday: Stock futures drift as the S&P 500 closes in record time
Here the markets were traded on Monday evening:
S&P 500 futures (ES = F): 4,226.5, +1 point (+ 0.02%)
Dow futures (YM = F): 34,610.00, -6 points (-0.02%)
Nasdaq Futures (NQ = F): 13,820.5, +16.25 points (+0.12%)
FILE - The Fearless Girl statue stands in front of the New York Stock Exchange in New York's Financial District in this file photo taken on March 23, 2021. Wall Street stock prices are broadly opening higher, making June a strong start as traders return from the Memorial Day holidays in the US (AP Photo / Mary Altaffer, File)
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Emily McCormick is a reporter for Yahoo Finance. Follow her on Twitter: @emily_mcck
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