Wall Street ends up with growth stocks, but inflation fears linger

By Caroline Valetkevitch

NEW YORK (Reuters) – U.S. stocks ended a choppy session slightly higher on Monday, helped by gains in Amazon.com and other mega-cap growth shares, while persistent worries over inflation and interest rates kept a lid on the market.

Shares of Amazon.com Inc rose 2% and were the biggest positive for the S&P 500 and Nasdaq after the online retailer split its shares 20 for 1.

Apple Inc shares climbed 0.5%. The tech giant at its annual software developer conference announced among other things that it would more deeply integrate its software into the core driving systems of cars.

Among sectors, consumer discretionary and communication services had the day’s biggest gains.

But investors remain focused on inflation and rising interest rates. A U.S. consumer price index report on Friday is expected to show still-high inflation, and U.S. Treasury yields rose on Monday.

A solid jobs report on Friday lowered hopes of a pause in the Federal Reserve’s aggressive policy-tightening plan to fight inflation.

“There’s been a push-pull in the markets now for a while,” said Paul Nolte, portfolio manager at Kingsview Investment Management in Chicago.

The jobs report was evidence that “the economy is still in OK shape,” he said. But “with inflation running kind of high and commodity prices still rising and putting in new all-time highs, maybe that peak of inflation is still in that ethereal future.”

Helping sentiment were easing regulatory crackdowns in China and signs in parts of China of a return to more normal activity after the country’s biggest COVID-19 outbreak in two years.

The Dow Jones Industrial Average rose 16.08 points, or 0.05%, to 32,915.78, the S&P 500 gained 12.89 points, or 0.31%, to 4,121.43 and the Nasdaq Composite added 48.64 points, or 0.4%, to 12,061.37.

Twitter Inc shares slipped 1.5% after billionaire Elon Musk said he might walk away from his buyout offer if the social media company fails to provide data on spam and fake accounts.

U.S.-listed shares of Chinese firms rallied after a report that Chinese regulators are concluding probes into ride-hailing giant Didi Global Inc and two other firms. The KraneShares CSI China Internet ETF jumped 4.7% and Didi Global gained 24.3%.

Advancing issues outnumbered declining ones on the NYSE by a 1.29-to-1 ratio; on Nasdaq, a 1.01-to-1 ratio favored decliners.

The S&P 500 posted 1 new 52-week high and 29 new lows; the Nasdaq Composite recorded 58 new highs and 129 new lows.

Volume on U.S. exchanges was 10.64 billion shares, compared with the 12.75 billion average for the full session over the last 20 trading days.

(Reporting by Caroline Valetkevitch in New York; Additional reporting by Medha Singh, Susan Mathew and Devik Jain in Bengaluru and Tom Westbrook in Singapore; Editing by Maju Samuel and Matthew Lewis)