Stock Market Today: S&P 500 starts week on front foot as economic jitters cool

Investing.com -- The S&P 500 climbed Monday as recession fears continue to ease ahead of busy week as the Fed releases the minutes of its July meeting, while chairman Jerome Powell is expected to offer clues on future monetary policy at the Jackson Hole central bank symposium on Friday. 

By 16:00 ET (20:00 GMT), the Dow Jones Industrial Average was up 236 points, or 0.6%, S&P 500 traded 1% and NASDAQ Composite climbed 1.4%.

Recession odds fall

Goldman Sachs revised its 12-month U.S. recession probability to 20% from 25%, citing the recent economic data that shows no signs of a downturn.

The increase was positioned midway between the long-term average recession probability of 15%—based on the historical occurrence of a recession every seven years—and the 35% estimate during the bank turmoil in early 2023.

The reversal in recession fears that's taken place since Aug. 5 has come with "better data, which has made the US economy look sturdy and resilient again," Macquarie said in a recent note. 

Monetary policy clues in focus as Fed minutes, Powell on calendar this week

The cooling recession fears comes ahead of busy week for clues on monetary policy as the Federal Reserve is set to lease the minutes from its Jul.31-Aug. 1 meeting, due on Wednesday, just days ahead of Friday’s Fed Chair Jerome Powell’s Jackson Hole speech on Friday.

Powell's speech is expected to lay out the carpet for a rate cuts in September, with current consensus betting on a 25 basis point cut.  

"We suspect that Chair Powell will outline the Fed's strategy in the context of the data at Jackson Hole, and the FOMC minutes on August 21 should shed light on the decision not to cut in July and whether 50bp might be on the table," Morgan Stanley said in a note. 

Advanced Micro Devices, HP, B. Riley in the spotlight

Advanced Micro Devices (NASDAQ:AMD) stock rose more than 4% after the chipmaker said it plans to acquire server maker ZT Systems for $4.9 billion, to expand its portfolio of artificial intelligence chips and hardware.

HP Inc (NYSE:HPQ) fell more than 3% after Morgan Stanley downgraded the PC maker to equal weight from overweight on valuation concerns amid worries that demand could slow in the back half of the year. 

B. Riley Financial (NASDAQ:RILY) stock slid over 5% following a drop of over 65% last week in the wake of its warning of a hit from its investment in Vitamin Shoppe-owner Franchise Group (NASDAQ:FRG).

The earnings season continues this week, with results due retailer Target (NYSE:TGT) and home improvement chain Lowe’s (NYSE:LOW) are expected through the week.

(Peter Nurse contributed to this story.)