By Yasin Ebrahim
Investing.com – The S&P 500 struggled for direction Monday, as investors awaited further catalysts, while the AMC-inspired meme trade rages on.
The S&P 500 fell 0.26%, the Dow Jones Industrial Average was down 0.45%, or 155 points, and the Nasdaq Composite was up 0.16%.
Both cyclicals and growth stocks were on the back foot amid a lack of investor appetite to buy stocks 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 tightened to 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 jumped 47%.
"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 was flat, but is likely set for a wild week as investors eye further updates on talks between Iran and talks between Iran and the global powers on a new nuclear deal that could lift bans on oil exports from the Islamic republic.
Tech stocks were largely in red, with Apple in the spotlight as the tech giant got its Apple Worldwide Developers Conference underway at 1PM ET. While iPhone and other software upgrades will likely capture the bulk of attention, there could be a few hardware surprises.
Wedbush said it expects a few surprises on the hardware front including a "new MacBook Pro release (14-inch and 16-inch display driven by the M1 chip) and hints around upcoming initiatives with some breadcrumbs dropped as developers crave bigger augmented reality functionality in the works for the coming years."
Apple (NASDAQ:AAPL), and Google-parent Alphabet (NASDAQ:GOOGL), traded lower, while Amazon.com (NASDAQ:AMZN), Microsoft (NASDAQ:MSFT), and Facebook (NASDAQ:FB) were mixed.
The Reddit meme trade continued, with AMC Entertainment (NYSE:AMC) rising 23% to 0put short-sellers to the sword once again. GameStop (NYSE:GME), BlackBerry (NYSE:BB), and Bed Bath & Beyond (NASDAQ:BBBY) were up sharply.