(May 18): US stocks swung between slight gains and losses on Monday as oil prices retreated from an earlier surge, and as semiconductor stocks traded mixed. Sentiment remained muted, with inflation remaining a key concern.
The S&P 500 Index rose 0.1% 10am in New York, with eight of 11 sectors in the green, led by communications and consumer staples. The Nasdaq 100 Index fell 0.1%. Micron Technology Inc gained 1.6% as investors watch for labour action at rival Samsung Electronics that could disrupt memory-chip supplies and further boost prices. With Nvidia Corp results due later this week, the stock fell 0.14%. The Philadelphia Semiconductor Index, known as the SOX, slipped 1.9%.
West Texas Intermediate crude oil slipped about 2.4% to trade at about US$103, giving up earlier gains after Iran’s Tasnim claimed the US was said to have proposed a temporary waver on oil sanctions. President Trump on Sunday said the “clock is ticking” after Iranian drones targeted a nuclear power plant in the United Arab Emirates.
“With the price of diesel now 62% higher than last April, we expect the repercussions of the energy shock to affect all aspects of consumer behavior, and especially household spending on food,” RSM US LLP chief economist Joseph Brusuelas wrote in a Monday note. He sees near-term inflation of 4.5%, with “risk of a faster pace” depending on whether the Strait of Hormuz stays largely closed.
Even so, Viktor Shvets, head of global desk strategy at Macquarie Capital, said that “inflation might not derail equities.” Investors are wrestling with long-term “Information Age”-driven disinflation that’s being “regularly offset by strong inflationary spikes,” Shvets wrote in a note.
In merger news, NextEra Energy Inc was said to be discussing a mostly-stock deal for Dominion Energy Inc that would value the company at around US$66 billion ($84.4 billion), making it by far the largest power deal on record. Dominion jumped 11%.
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Walmart Inc, which also reports this week, was little changed. Investors are looking for signals about consumer health as gasoline and other prices climb.
Uploaded by Magessan Varatharaja
