The stock market started the week on a cautious note, with traders awaiting key inflation gauges, a slew of Federal Reserve speakers and the beginning of the U.S. earnings season.

Following a three-day slide in the S&P 500, the equity benchmark fluctuated near 4,400 Monday. The market didn’t get much support from the megacap space, with Amazon.com Inc. down ahead of its annual Prime Day event. A gauge of big banks remained higher even after news on a plan to boost capital requirements. The earnings season kicks off in earnest on Friday, when JPMorgan Chase & Co., Citigroup Inc. and Wells Fargo & Co. report.

Momentum has slowed since the market notched a strong first-half rally as concern resurfaced about the impact of the many economic crosscurrents on corporate profits. Morgan Stanley’s Michael Wilson became the latest to warn that earnings forecasts will matter more than usual this time around given elevated equity valuations, higher interest rates and dwindling liquidity.

“It’s going to be harder for the market to rally if all we get is an earnings season that is ‘not as bad as we thought’, especially since the market has become so expensive,” said Matt Maley, chief market strategist at Miller Tabak + Co.

‘JUST OK’

Maley noted that this does not mean that if the guidance is “just OK” that the market will sell off meaningfully. However, if corporate outlooks show any material disappointment, “it should create some serious headwinds for the stock market,” he noted.

There’s more pain on the way for the S&P 500 as profit warnings and fears of higher interest rates combine to threaten the key U.S. stock indicator, according to the latest Markets Live Pulse survey.

In other corporate news, a gauge of U.S.-listed Chinese shares climbed on news the Asian nation will extend policies to support cash-strapped developers and shore up the ailing real estate sector. Icahn Enterprises LP soared as Carl Icahn renegotiated loan terms with a group of banks just months after a report by short seller Hindenburg Research sent shares in his investment firm tanking. 

Key events this week:

• St. Louis Fed President James Bullard speaks, Tuesday.
• Canada rate decision, Wednesday.
• Bank of England Governor Andrew Bailey speaks, Wednesday.
• U.S. CPI, Wednesday.
• Federal Reserve issues Beige Book, Wednesday.
• Fed speakers include Neel Kashkari, Loretta Mester, Raphael Bostic, Wednesday.
• China trade, Thursday.
• Eurozone industrial production, Thursday.
• U.S. initial jobless claims, PPI, Thursday.
• U.S. University of Michigan consumer sentiment, Friday.
• U.S. banks kick off earnings, Friday.

Some of the main moves in markets:

Stocks

• The S&P 500 was little changed as of 10:53 a.m. New York time
• The Nasdaq 100 fell 0.2 per cent
• The Dow Jones Industrial Average rose 0.4 per cent
• The Stoxx Europe 600 rose 0.2 per cent
• The MSCI World index rose 0.1 per cent

Currencies

• The Bloomberg Dollar Spot Index was little changed
• The euro was little changed at US$1.0975
• The British pound fell 0.2 per cent to US$1.2813
• The Japanese yen rose 0.4 per cent to 141.70 per dollar

Cryptocurrencies

• Bitcoin rose 0.4 per cent to US$30,313.55
• Ether was little changed at US$1,870.33

Bonds

• The yield on 10-year Treasuries declined three basis points to 4.04 per cent
• Germany’s 10-year yield advanced one basis point to 2.65 per cent
• Britain’s 10-year yield advanced one basis point to 4.66 per cent

Commodities

• West Texas Intermediate crude rose 0.3 per cent to US$74.08 a barrel
• Gold futures fell 0.3 per cent to US$1,927.40 an ounce