Stocks Trying to Battle Back From Early Weakness

U.S. stocks have come off the worst levels of the day and are threatening a move into positive territory. The markets have been choppy today and are showing some resiliency in the face of some softer-than-expected Chinese economic data that prompted rate cuts by the country's central bank. Also, the markets are bouncing back despite a sharp drop in New York manufacturing output and a tumble in homebuilder sentiment, with both hitting lows not seen since the early stages of the pandemic. Treasuries are rising to apply some downside pressure on yields and the inversions of the curve remain. The U.S. dollar is rallying, but crude oil prices are falling, along with gold, following the China and U.S. economic data. Equity news is very light today but is set to heat up starting tomorrow as heavyweights from the retail sector begin to put the finishing touches on Q2 earnings season. Gilead Sciences is rising after announcing upbeat results from its breast cancer treatment. Asia finished mixed, and Europe has overcome early weakness and is modestly higher.

At 10:45 a.m. ET, the Dow Jones Industrial Average is ticking 0.1% higher, while the S&P 500 Index and the Nasdaq Composite are decreasing 0.2%. WTI crude oil is dropping $3.61 to $88.48 per barrel, and Brent crude oil is falling $3.83 at $94.32 per barrel. The gold spot price is trading $24.50 higher to $1,791.00 per ounce, and the Dollar Index is rising 0.7% to 106.29.

Equity news is light to kick off the week that will see key companies from the retail sector put the finishing touches on Q2 earnings season. Of the 455 S&P 500 companies that have reported thus far, roughly 63% have topped revenue forecasts and approximately 75% have bested profit projections, per data compiled by Bloomberg. Compared to last year, revenue growth is tracking to be up 14.8% and earnings are 8.8% higher.

Schwab's Chief Investment Strategist, Liz Ann Sonders discusses the market environment in her latest article, Both Sides Now: Fed's Dueling Mandates, how July's hot jobs report will likely keep the Fed in a hawkish position, but key to watch moving forward is a continued softening in leading labor and inflation indicators.

Gilead Sciences Inc. (GILD $66) is trading higher after the biotech company announced positive results from a study of its breast cancer treatment.