Indices close mixed ahead of new inflation data

• US stocks ended the week on a mixed note.

• Traders struggled to extend their rally after erasing most of the losses from last week’s big rout.

• New inflation data will arrive on Tuesday with the producer price index report for July.

U.S. stocks wobbled on Monday, struggling to maintain the rally that materialized late last week ahead of fresh inflation data for July.

Stocks oscillated between gains and losses throughout the session, unable to decisively erase losses from last Monday’s selloff, which was the worst in two years.

On Tuesday, investors will digest the first of two inflation data to be released this week. The producer price index, a measure of wholesale inflation, is expected to be in line with June’s data, at 0.2%.

The second update will be the main event, with the consumer price index expected to show the rise in inflation the average consumer faced last month. Economists expect the index to show a slight increase on a monthly basis, but not enough to cloud expectations that the Fed will begin cutting interest rates at its policy meeting next month.

Yet rate cuts are a double-edged sword. Markets are demanding lower interest rates, but a Fed move would also be an acknowledgement that the economy is slowing. Recession fears drove the last big selloff, and any weakness in the economy could be the catalyst for the next big stock market decline.

“Bearers believe that an aggressive Fed rate-cutting program is a warning of recession, not a clear reflection that inflation has been brought under control,” veteran investor Louis Nevallier wrote in a note published Monday.

Here’s where the U.S. indices stood at 4 p.m. Monday closing:

Geopolitical tensions also flared up earlier this week, with the Pentagon sending more U.S. forces to the Middle East in anticipation of a possible attack by Iran. The United States is anticipating an attack on Israel after the assassination of a Hamas leader in Tehran. U.S. crude prices jumped as much as 4% on Monday.

Here’s what else is happening today:

In commodities, bonds and cryptocurrencies:

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