S&P 500 higher after US inflation data

US stocks opened higher after the release of inflation data by the Bureau of Labor Statistics, showing prices rose 3.2% in July from a year ago, marking the first increase after 12 months of steady declines.

Overall inflation has dropped from last summer’s peak of 9.1%. The 10-year Treasury rose to kick off the final week in a September that has seen big losses so far. The broader index added 0.4%, while the Nasdaq Composite gained by 0.5%.

The Dow Jones Industrial Average was flat. The S&P 500 has fallen more than 4% in September, on pace for its second straight losing month and its worst month since December. The tech-heavy Nasdaq Composite is down 6% in September as growth stocks bore the brunt of the sell-off, heading for its biggest monthly loss since December. The blue-chip Dow is off by a more modest 2% this month.

Investors are closely monitoring progress on a budget resolution in Washington. Lawmakers expressed few signs of movement on a deal that would keep the US government funded for the remainder of the fiscal year.

Microsoft was upgraded to neutral from sell, citing the “potential monetary benefit from Generative AI” despite the company’s recent underperformance. Energy was the leading advancer in the S&P 500 on Monday, with the sector last rising 0.9% in midday trading.

Coterra Energy and EOG Resources shares outperformed in the sector, up by 2.3% and 1.9%, respectively. JPMorgan upgraded Dow Inc. to overweight from neutral and maintained its price target of $55, implying shares can gain substantially from where they closed Friday.