The S&P 500 fluctuated between gains and losses Monday as investors awaited further catalysts, while a surge in Biogen helped biotech stocks to their best day of the year so far.
The S&P 500 fell 0.1%, the Dow Jones Industrial Average was down 0.4%, or 126 points, and the Nasdaq Composite was up 0.23%.
Stocks were on the back foot amid a lack of investor appetite to make risky bets ahead of the key data due later this week including the consumer inflation data due Thursday.
Inflation remains a hotly debated topic as investors fear that if price pressures spiral out of control, the Federal Reserve could be forced to tighten too aggressively, potentially risking a recession.
The weaker jobs report, released Friday, meanwhile, reinforced expectations the Federal Reserve is unlikely to taper its bond purchases sooner than expected.
"Given the lack of clarity from the labor market data as well as the temporary labor supply constraints, we continue to expect that the Fed will provide an advance notice of tapering at the September FOMC meeting," Morgan Stanley (NYSE:MS) said.
Cyclicals stocks – those that move in tandem with economy – including materials and industrials were the worst performers on the day.
Still, Wall Street remains bullish on cyclicals amid rising second-quarter earnings estimates from these economically-sensitive cohort of stocks that could keep the broader market trending higher.
"The S&P 500 Index is expected to report an earnings growth rate of 57% for the second quarter, exceeding the first quarter’s reported numbers," Wells Fargo (NYSE:WFC) said. "Industrials lead earnings expectations … we remain favorable on the sector."
Health care was one of the few bright spots on the day, with Biogen (NASDAQ:BIIB) taking the plaudits after the Food & Drug Administration approved its Alzheimer's drug. The stock closed up 38%, pushing the broader biotech index to its biggest one-day gain of 2021.
"With little in the way of prescribing restrictions per the issued label, and with the approval now in hand, we are increasing our valuation multiple to 15x (from 12x) which yields a new $300 target," Wedbush said in a note.
Energy closed lower and is likely set for a wild week as investors eye further updates on talks between Iran and global powers on a new nuclear deal that could lift sanctions including a ban on oil exports imposed on the Islamic Republic.
Tech stocks ended the day unchanged even as large-cap tech ended mostly higher. Apple (NASDAQ:AAPL) was in focus after revealing a slew of software updates at its Apple Worldwide Developers Conference, which got underway at 1PM ET. Facetime improvements including support for Windows and Android platforms, and an update to its Watch software were among the highlights of upcoming upgrades. Its shares closed flat.
Apart from Amazon.com (NASDAQ:AMZN), Google-parent Alphabet (NASDAQ:GOOGL), Microsoft (NASDAQ:MSFT), and Facebook (NASDAQ:FB) ended higher.
In other news, AMC Entertainment (NYSE:AMC) cut some gains to end the day up 15%. GameStop (NYSE:GME), BlackBerry (NYSE:BB), and Bed Bath & Beyond (NASDAQ:BBBY) also closed higher.