Nasdaq, S&P, and Dow trade muted as investors look ahead to inflation data

The major market averages trade mostly unchanged while yields advance on Monday as investors have their eyes on key inflation data that is set to arrive later in the trading week.

The benchmark S&P 500 (SP500), the blue-chip Dow (DJI), and the tech focused Nasdaq Composite (COMP:IND) are all near flat on the trading day.

From a sector point of view, six of the 11 S&P segments are higher, with Consumer Discretionary and Real Estate at the top of the list. At the same time, the two worst performing sectors on the day are Health Care and Info Tech.

Looking towards the Treasury market and yields nudged higher again with the shorter end U.S. 2 Year Treasury yield (US2Y) advancing by 3 basis points to 4.78%. At the same time, the longer end U.S. 10 Year Treasury yield (US10Y) moved up by 3 basis points to 4.43%.

See how other yields trade across the entire yield curve here.

The economic calendar is empty on Monday, but Wall Street is set to receive the consumer price index for March on Wednesday and economists are predicting a 3.4% Y/Y rise.

"How fast the US economy is growing, and how fast inflation is falling, will determine how soon the Fed cuts rates, and that in turn will play a big role in determining rate/yield differentials," said Kit Juckes, F/X strategist at SocGen.

"A slip in core CPI inflation to 3.7% y/y and a 0.3% monthly gain won’t really feed expectations of a June hike much after last week’s solid data dented them. Market expectations are drifting in favor of a cut in July rather than June, and it’s easy to see why," Juckes added.

"Inflation concerns also meant that Treasury yields reached their highest levels since November across the curve," said Deutsche Bank's Henry Allen.