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US stocks struggle for direction ahead of Powell’s testimony, CPI data

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Investing.com– U.S. stocks struggled for direction Monday as cautioned set in ahead of testimony by Federal Reserve Chair Jerome Powell to Congress and key inflation data this week week.

At 15:00 ET (19:00 GMT), Dow Jones Industrial Average fell 42 points, or 0.1%, S&P 500 climbed was flat and NASDAQ Composite rose 0.2%.

Powell set to testify, CPI data approaches

Powell will testify before the Senate and the House on Tuesday and Wednesday, respectively, with the bulk of his testimony expected to focus on monetary policy.

Powell had signaled last week that while the Fed had made some progress towards bringing down inflation, policymakers still did not have enough confidence to begin trimming rates. The minutes of the Fed’s June meeting furthered this notion.

Weaker-than-expected labor data from last week ramped up hopes that the jobs market was cooling, giving the Fed more impetus to begin cutting interest rates.

But inflation is likely to be the central bank’s key point of consideration in reducing interest rates. The consumer price index is due on Thursday, and is expected to rise 0.1% m/m and 3.1% y/y. The core CPI is expected to increase by 0.2%.

Traders were seen pricing in an over 72% chance for a 25 basis point cut in September, up from a 57.9% chance seen last week.

Q2 earnings to begin this week

Beyond rate expectations, the focus this week will be on the second-quarter earnings season, which is set to begin with a slew of heavyweight bank earnings on Friday.

Markets will be watching to see just how robust corporate earnings remained under pressure from high interest rates and sticky inflation.

JPMorgan Chase (NYSE:JPM), Wells Fargo (NYSE:WFC) and Citigroup (NYSE:C) are set to report earnings on Friday.

Numbers from PepsiCo (NASDAQ:PEP) and Delta Air Lines (NYSE:DAL) are also die this week.

Paramount in Skydance merger, Boeing agrees to guilty plea; Corning in earnings surprise

Elsewhere, Paramount Global (NASDAQ:PARA) stock fell 5% after Skydance Media agreed to merge with the entertainment giant, ending months of speculation. 

Boeing (NYSE:BA) stock was just above the flatline after the aircraft manufacturer agreed to plead guilty to a criminal fraud conspiracy charge to resolve a U.S. Justice Department investigation into two 737 MAX fatal crashes.

Corning Incorporated (NYSE:GLW) raised its Q2 core sales to $3.6B from $3.4B and said it expected adjusted earnings per share at the high end, or slightly above its guidance range of $0.42 to $0.46, sending its shares up 11% to fresh 52-week highs.

(Peter Nurse, Ambar Warrick contributed to this article)

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