Tech stocks had their best day in two weeks, helping U.S. equities edge higher in light trading as traders weighed the prospect of a soft landing for the economy. Treasuries fell.

The tech-heavy Nasdaq 100 rose 1.2 per cent as AI-favorite Nvidia Corp. and other technology giants drove Monday’s advance. On Friday, the tech-heavy benchmark had notched its longest weekly losing streak this year, the gauge has slid 3.5 per cent in August. Smaller stocks were under pressure with the Russell 2000 touching the lowest in a month as risk-appetite waned.

August is typically a slow month due to low liquidity and moves in either direction should not be taken seriously, according to Jason Draho, head of asset allocation Americas at UBS Global Wealth Management.

“The fundamental outlook for the U.S. economy hasn’t materially changed in the past two weeks,” Draho wrote. “Investors should take any data point or two and week-to-week market moves with a grain of salt, especially during the summer slowdown.”

Treasury yields wavered before ticking higher as high-grade corporate bond sales weighed on prices. The policy sensitive two-year extended an advance into the fourth day to 4.96 per cent, while the 10-year traded at 4.19 per cent. 

Traders are betting interest rates will outpace inflation for years to come while investors sitting on record first-half gains are having to contend with central bankers warning they are in no rush to cut interest rates. 

“Some retracement of the broad market since July 31 suggests to us a pause that refreshes has likely occurred, rather than the end of the bull market,” John Stoltzfus, chief investment strategist at Oppenheimer & Co., wrote in a research note. “We remain of the view based on improving economic and corporate fundamentals that the U.S. economy could actually skirt a recession this cycle.”

Lisa Shalett, chief investment officer at Morgan Stanley Wealth Management, takes a dimmer view saying the economy is already in a rolling recession that will hit the services sector next.

“Consumption, profit margins and corporate pricing power are yet to be reset, as the delayed impact of tighter policy should ultimately pressure nominal gains,” she wrote.

Updates from China unnerved markets on Monday amid concerns about Country Garden Holdings Co. and private-wealth manager, Zhongzhi Enterprise Group Co. Country Garden, once China’s biggest developer, has emerged as the latest flashpoint of the country’s property woes.

“The more days that go by without a comprehensive fiscal stimulus plan the more clear it becomes there will not be one,” Brad Bechtel, a Jefferies strategist said of China’s central bank. “The big bazooka is not coming.”

Focus later this week will be on minutes of the Federal Reserve’s latest policy meeting as traders seek clues on the central bank’s next move. Investors who’d bet on a pivot to easier policy this year are having to adjust their bets as officials signal they will keep interest rates higher for longer. 

In emerging markets, Argentina’s already-distressed debt sagged after a populist who vowed to burn down the central bank won surprisingly strong support in a primary vote. 

The greenback strengthened while the offshore yuan fell to its weakest level since November and the ruble crashed through the level of 100 to the dollar for the first time since March. In commodities, gold and crude slumped.

Corporate Highlights:

• Hawaiian Electric Industries Inc. plunged by a record 34 per cent on concern that its power lines may be linked to the deadly Maui wildfires.
• U.S. Steel Corp. surged 37 per cent after the company rejected a US$7.25 billion takeover offer from peer Cleveland-Cliffs Inc. and said it will instead start a review of its strategic options.
• Tesla Inc. slipped 1.2 per cent, triggering a selloff for other producers of electric vehicles, after it rolled out a new round of price cuts in China.
• Nikola Corp. plummeted after the manufacturer announced it will recall trucks and temporarily stop sales after several battery fires.

Key events this week:

• China medium-term lending, retail sales, industrial production, fixed-asset investment, FX net settlement, Tuesday
• Japan industrial production, GDP, Tuesday
• UK jobless claims, unemployment, Tuesday
• U.S. retail sales, empire manufacturing, business inventories, cross-border investment, Tuesday
• Reserve Bank of Australia policy minutes, Tuesday
• Federal Reserve Bank of Minneapolis President Neel Kashkari speaks, Tuesday
• China property prices, Wednesday
• Eurozone industrial production, GDP, Wednesday
• UK CPI, Wednesday
• U.S. FOMC minutes, housing starts, industrial production, Wednesday
• U.S. initial jobless claims, U.S. Conf. Board leading index, Thursday
• Eurozone CPI, Friday

Some of the main moves in markets:

Stocks

• The S&P 500 rose 0.6 per cent as of 4 p.m. New York time
• The Nasdaq 100 rose 1.2 per cent
• The Dow Jones Industrial Average was little changed
• The MSCI World index was little changed
• The Russell 2000 Index fell 0.2 per cent

Currencies

• The Bloomberg Dollar Spot Index rose 0.3 per cent
• The euro fell 0.4 per cent to US$1.0905
• The British pound fell 0.1 per cent to US$1.2681
• The Japanese yen fell 0.3 per cent to 145.46 per dollar

Cryptocurrencies

• Bitcoin fell 0.3 per cent to US$29,322.86
• Ether fell 0.7 per cent to US$1,839.81

Bonds

• The yield on 10-year Treasuries advanced three basis points to 4.19 per cent
• Germany’s 10-year yield advanced one basis point to 2.64 per cent
• Britain’s 10-year yield advanced four basis points to 4.57 per cent

Commodities

• West Texas Intermediate crude fell 0.8 per cent to US$82.55 a barrel
• Gold futures fell 0.3 per cent to US$1,939.80 an ounce