NEW YORK (AP) — Stocks are drifting in their first trading since a big rally for Wall Street hit its first roadblock in six weeks. The S&P 500 was little changed in early trading Monday. It remains close to its highest level in a year, which it reached a couple weeks ago. The Dow was just barely higher and the Nasdaq composite rose 0.2%. Lucid Group jumped 9.3% after the electric vehicle maker announced a deal to provide powertrain and battery systems to Aston Martin. Teslas slipped 0.7% as its torrid rally cools a bit amid concerns it went overboard. It’s already more than doubled this year.
THIS IS A BREAKING NEWS UPDATE. AP’s earlier story follows below.
Markets on Wall Street were slow to gain traction Monday, while global shares mostly fell after a short-lived armed rebellion in Russia added to uncertainties over the war in Ukraine.
Futures for the Dow Jones industrials and the S&P 500 were flat before the bell Monday.
The rebellion by mercenary soldiers who briefly took over a Russian military headquarters on an ominous march toward Moscow was over. But the brief mutiny weakened President Vladimir Putin just as his forces were facing a fierce counteroffensive in Ukraine.
Yevgeny Prigozhin and his Wagner troops were some of Russia’s most effective fighters in Ukraine. Their aborted takeover of the capital also left their fate uncertain.
Tim Waterer, chief market analyst at KCM Trade, said such geopolitical uncertainties have set off a cautious mood.
“On the back of recent hawkish central bank moves amid high inflation and low growth environments, investors are now also having to factor in the chance of escalation on the geopolitical side of things, which is adding another layer of uncertainty to the equation,” he said.
Investors have been rattled, also by signs that Europe’s economy appears to be weaker than expected and by still more interest rates by central banks as they try to get inflation under control. High rates drive down inflation by slowing economic activity, which raises risks of recession.
In Europe at midday, France’s CAC 40 rose 0.2%, Germany’s DAX slipped 0.2% and Britain’s FTSE 100 was unchanged.
In Asian trading, Japan's benchmark Nikkei 225 lost nearly 0.3% to finish at 32,698.81. South Korea's Kospi rose 0.5% to 2,582.20. Hong Kong's Hang Seng was down 0.5% to 18,794.13, while the Shanghai Composite, reopening after a holiday, dropped 1.5% to 3,150.62. Australia’s S&P/ASX 200 shed 0.3% to 7,078.70.
“We have a slowing U.S. economy, a slowing global economy, all with on-going extreme inflation and high and going higher interest rate levels. There is no bullish stock market scenario here,” said Clifford Bennett, chief economist at ACY Securities.
High interest rates in the United States have already dragged manufacturing and other industries into contraction, while also helping to cause several failures in the banking system that rattled confidence. Federal Reserve Chair Jerome Powell said last week that even though his central bank didn’t raise rates last week, it could still push through a couple more hikes by the end of this year.
A preliminary report last week indicated the overall U.S. economy continues to grow, even though manufacturing is shrinking and its output fell to a five-month low.
In energy trading, benchmark U.S. crude rose 51 cents to $69.67 per barrel in electronic trading on the New York Mercantile Exchange. It fell 35 cents to $69.16 on Friday. Brent crude, the international standard, gained 56 cents to $74.56 a barrel.
In currency trading, the U.S. dollar fell to 143.26 Japanese yen from 143.58 yen. The euro cost $1.0916, up slightly from $1.0903.
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Kageyama reported from Tokyo; Ott reported from Silver Spring, Maryland.
Yuri Kageyama And Matt Ott, The Associated Press
