Dow, S&P 500 end lower Monday, kick off August under cloud of potential recession

U.S. stocks finished lower Monday, kicking off August on a downbeat note, after a strong July rally carried the main equity benchmarks to their best month of gains in almost two years. The Dow Jones Industrial Average shed about 45 points, or 0.1%, to end the session near 32,799. The S&P 500 index lost 0.3%, while the Nasdaq Composite Index closed 0.2% lower. The month of August kicked off under a series of unknowns, including whether investors betting on the Federal Reserve to "pivot" away from its aggressive rate-hiking stance to quell inflation at its sharpest in four-decade might be risking further losses, as both the equity and debt markets aim to turn the page on a painful first half of 2022. Another big question looming over markets has been whether parts of the bond market and commodity complex may be signaling that a recession looms, despite vows by Fed Chairman Jerome Powell to battle inflation, while aiming to steer the economy to a soft landing. The 10-year Treasury yield continued to retreat Monday to about 2.605%, down from its peak 3.482% yield so far this year on June 14, according to Dow Jones Market Data. Those questions, including if the strong U.S. labor market can help the economy avoid a recession, will keep Friday's job report from July in focus.

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