Wall Street looks for direction ahead of more inflation data and Fed speak

[Wall street district in New York City with USA flags in the background]
FilippoBacci

U.S. stocks look for clear direction on Monday as investors brace for a closely watched inflation report later this week and look to more Fed speak while assessing President Donald Trump's new H-1B visa fees.

The blue-chip Dow (DJI [https://seekingalpha.com/symbol/DJI]) is lower by 0.2%. At the same time, the benchmark S&P 500 (SP500 [https://seekingalpha.com/symbol/SP500]) trades near even and the tech-focused Nasdaq Composite (COMP:IND [https://seekingalpha.com/symbol/COMP:IND]) has climbed up by 0.1%.

Across sectors, eight of the 11 S&P groups are in negative territory, with Energy suffering the most. At the other end, Consumer Discretionary has pushed up the most on the session.

Over in the bond market the longer-end U.S. 10-year Treasury yield (US10Y [https://seekingalpha.com/symbol/US10Y]) is near even at 4.13% and the shorter-end U.S. 2-year Treasury yield (US2Y [https://seekingalpha.com/symbol/US2Y]) is near flat at 3.57%.

Trump on Friday slapped a $100,000 annual fee on H-1B visas, dealing [https://seekingalpha.com/news/4496797-tech-firms-urge-h-1b-visa-holders-avoid-overseas-travel] a blow to companies—mainly those in the tech and financial sectors—that rely on the widely used Visa program to bring in highly skilled foreign talent. Tech firms, including Microsoft (MSFT [https://seekingalpha.com/symbol/MSFT]), Alphabet (GOOG [https://seekingalpha.com/symbol/GOOG]), and Amazon (AMZN [https://seekingalpha.com/symbol/AMZN]), have reportedly warned their staffers with H-1B visas to avoid overseas travel and return to the U.S. by Saturday.

"It will also be interesting to see the reaction from corporate America to Trump's weekend plans to impose a $100,000 application fee for the widely used H-1B visa for foreign workers in specialty occupations. It's caused a huge amount of uncertainty over the weekend for those that rely on it," Deutsche Bank's Jim Reid said.

In the week ahead, the PCE price index will grab eyeballs on Friday. “Friday's PCE is the next key economic data point to watch, as its strength or weakness will play into the calculation of the Federal Reserve's next interest rate decision in late October. In the near term, we believe that labor market data carries more weight for the Fed than the inflation data,” Rick Gardner, chief investment officer, RGA Investments said.

On the economic calendar, there are a few speakers from the Federal Reserve on Monday. New York Fed President John Williams, St. Louis Fed President Alberto Musalem, Cleveland Fed President Beth Hammack and Richmond Fed President Thomas Barkin are all slated to speak.

"Fed President Williams, as a leading economic voice, is also likely to attract market attention," UBS' Paul Donovan said.

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