Nasdaq, S&P, and Dow, ended unchanged while yields moved up

Wall Street’s major market averages ended unchanged on Monday while Treasury yields continued their upward climb. Investors now shift their eyes to this week’s inflation print which is scheduled for Wednesday in the form of the CPI report.

The tech focused Nasdaq Composite (COMP:IND) concluded +0.03%, the benchmark S&P 500 (SP500) ended -0.04%, and the blue-chip Dow Jones (DJI) finished -0.03%.

On a sector-by sector stance, five of the 11 S&P segments closed out Monday on top with the Real Estate and Consumer Discretionary sectors leading the way higher. In reverse, the two worst performing areas of the market were Energy and Health Care.

Furthermore, U.S. Treasury yields were able to advance again. The shorter end U.S. 2 Year Treasury yield (US2Y) advanced by 4 basis points to 4.79%. At the same time the longer end U.S. 10 Year Treasury yield (US10Y) moved up by 2 basis points to 4.42%.

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

Looking at the commodities, and investors will have noticed that oil prices eased and gold topped another all-time trading high. UBS now sees the precious metal topping $2,500 by year-end.

The economic calendar was 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.

"A hot inflation print for March can force the Fed to adopt a more hawkish monetary policy stance. With equity markets sitting at historically elevated levels, rate cuts getting taken off the calendar could spark a broad market pullback in the near-to-medium term,” Ahan Vashi, Investing Group leader of the Quantamental Investor stated.

"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 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.