Stocks make little progress with Treasury yields choppy in holiday-shortened session

investing.com:

By Sinéad Carew

NEW YORK (Reuters) — Wall Street stock indexes were virtually unchanged on Monday while Treasury yields were higher after falling earlier as investors eyed a mixed bag of economic data ahead of the second-quarter earnings season and managed uncertainty around central bank policy.

After earlier gains, European shares pulled back and on Wall Street, while the Dow was up slightly, the S&P 500 and the Nasdaq were struggling to decide on a direction in a shorter trading day ahead of the U.S. July 4 holiday.

A widely watched section of the U.S. Treasury yield curve hit its deepest inversion since the high inflation era of Fed Chairman Paul Volcker, reflecting financial markets' concerns that an extended Federal Reserve rate hiking cycle will tip the United States into recession.

U.S. manufacturing slumped further in June to levels last seen when the economy was reeling from the initial wave of the COVID-19 pandemic, according to a survey on Monday that also showed price pressures at the factory gate deflating. However, U.S. construction spending rose more than expected in May as a severe shortage of houses boosted single-family homebuilding.

U.S. data on Friday, which hinted towards cooling inflation, helped bolster gains in the tech sector and underpinned sentiment in world stocks. This saw the tech-heavy Nasdaq on Friday make its biggest first-half gain in 40 years. Apple (NASDAQ:AAPL) closed with a $3 trillion market valuation for the first time.

«The trading you see today is a mix of some people speculating that the previous six-month worst performers will catch up and others speculating that the leaders in the first half will continue to outperform,» said Peter Tuz, president of Chase Investment Counsel