U.S. Equities Rebound as Inflation Takes Center Stage

Major U.S. equities indexes moved higher on Monday, recovering a portion of the steep losses posted last week amid signs of a slowing job market.

Inflation in Focus

In the new trading week, inflation will likely come back into focus. Wednesday’s Consumer Price Index (CPI) release will provide the last major gauge of price pressures before the Federal Reserve’s policy meeting next week.

The S&P 500, Dow industrials, and Nasdaq posted nearly identical daily gains, with all three indexes ending Monday’s session approximately 1.2% higher.

Supermicro Shares Jump on Accounting Report

Shares of Super Micro Computer (SMCI) jumped 6.1%, notching Monday’s top performance in the S&P 500. The stock recently came under pressure as short seller Hindenburg Research raised alarms about the server and data storage provider’s accounting practices. But a report published Monday by GlassHouse Research, a forensic accounting firm specializing in pinpointing fraudulent activities by public companies, downplayed Hindenburg’s concerns.

Airline Stocks Soar on Positive Industry Trends

Airline stocks moved higher following positive comments on the air travel industry from BofA Securities. According to analysts, the airlines are poised to benefit from moderating domestic capacity, stable demand, and reduced fuel costs. BofA also upgraded JetBlue (JBLU) stock to “neutral,” citing the carrier’s progress on its strategic initiatives, and JetBlue shares soared 7.2%. United Airlines (UAL) shares added 6% on the day, while Delta Air Lines (DAL) and American Air Lines (AAL) both advanced 3.9%.

Paycom Software Rebounds on Strong Performance

Shares of human resources software provider Paycom Software (PAYC) were up 5.8%. With Monday’s strong performance, the stock clawed back from a string of losses posted last week amid reports of CEO Chad Richison selling more than $600,000 worth of company stock. In its most recent earnings report, released at the end of July, recurring revenue growth helped Paycom beat profit expectations, leading the company to lift its full-year guidance and boost its stock buyback plan.

Enphase Energy Faces Biggest Loss in S&P 500

Enphase Energy (ENPH) shares tumbled 5.2%, the biggest loss of any S&P 500 constituent. Although analysts have indicated that interest-rate cuts could benefit the solar technology firm’s international expansion plans, Enphase stock remains down more than 20% in 2024.

Humana Shares Fall on Rating Risks

Humana (HUM) shares fell 3.9% after investment bank Leerink Partners highlighted risks to the “Star ratings” of certain health care plans run by the insurer. The ratings assigned by the Centers for Medicare and Medicaid Services affect insurance providers’ eligibility for quality bonuses.

Bath & Body Works Faces Sales Pressure

Shares of fragrance and personal care product retailer Bath & Body Works (BBWI) slipped 3.7%. The stock has been under pressure since the company lowered its sales guidance at the end of August, citing difficult consumer spending trends.

Overall, the U.S. equities market rebounded on Monday, with the S&P 500, Dow industrials, and Nasdaq all posting gains. Supermicro shares jumped after a report downplayed concerns about the company’s accounting practices. Airline stocks soared as positive industry trends were highlighted, and Paycom Software rebounded on strong performance. However, Enphase Energy faced the biggest loss in the S&P 500, and Humana shares fell due to rating risks. Bath & Body Works also faced sales pressure.

As the week progresses, investors will be closely watching the CPI release to gauge inflationary pressures and anticipate the Federal Reserve’s next moves. The market remains dynamic, and investors should stay informed and adapt their strategies accordingly.