Updated at 4:15 pm EST
Stocks finished lower for the fourth straight day Monday, while the dollar consolidated gains against its global peers, as investors extended their retreat from risk markets following an escalation of military action in the Ukraine and ahead of a the unofficial start to the third-quarter earnings season later this week.
Reports from Kyiv suggest Russia missiles targeted both the Ukrainian capital as well as energy installations in cities around the country Monday in an apparent retaliation for the destruction of a key bridge linking Crimea to the mainland.
The attacks on Kyiv, the most significant in several weeks, rattled global markets and pushed investors into the arms of the safe-haven U.S. dollar, which rose 0.31% against its global peers to change hands at 113.15 in late New York trading.
The dollar index, which tracks the greenback against a basket of six global currencies, was also elevated by last week's stronger-than-expected September payroll report, which showed U.S. employers added 263,000 new jobs last month, pulling the headline unemployment rate to 3.5% and cementing the case for another larger rate hike from the Federal Reserve next month.
The CME Group's FedWatch, in fact, pegs the chances of a fourth consecutive 75 basis point rate hike at just under 80%, with the bulk of betting pointing to a Fed Funds rate of between 4.5% and 4.75% by the end of the year.
That escalation clipped a short-lived rally on Wall Street last week, and looks to hang over stocks at the start of trading on Monday, as well, as investors look ahead to a busy week for economic data and earnings releases, as well as minutes from the Fed's September meeting on Wednesday.
The S&P 500, however, is still up 1.51% for the month, despite Friday's sell-off, although that compares to a 23.6% decline for the year, one of the worst performances for the main U.S. benchmark in at least two decades.
Inflation and earnings will likely dictate market direction later this week as investors look for any suggestion of a slowdown in consumer price pressures and their impact on corporate profits heading into the final months of the year.
Thursday's September inflation reading, slated for 8:30 am Eastern time, is expected to show a moderation in the headline rate but another modest acceleration in core consumer price pressures, a mix that is likely to do little to change the Fed's rate hike path nor its determination to keep the elevated well into the coming year.
The data will follow minutes of the Fed's October meeting, which will be released on Wednesday afternoon, and the unofficial start of the third quarter earnings season on Friday, with September quarter updates from JPMorgan Chase (JPM) - Get Free Report, Citigroup (C) - Get Free Report, Wells Fargo (WFC) - Get Free Report and Morgan Stanley (MS) - Get Free Report.
Collective S&P 500 profits are expected to rise 4.1% from last year to $463.9 billion, according to data from Refinitiv, lead by gains from both the energy and industrials sectors.
The S&P 500 finished down 0.75%, while the Dow Jones Industrial Average, which is up 2% for the month, fell 93 points, or 0.32%, to 29,202l and the tech-focused Nasdaq lost 1.04%, following to a two-year low.
Overnight in Asia, China markets re-opened following that nation's traditional October holiday week, with tech stocks leading indices sharply lower following a move by the Biden administration to tighten rules on semiconductor technology exports.
The region-wide MSCI ex-Japan benchmark fell 1.95% into the final hours of trading, while the Nikkei 225 in Tokyo was marked 0.71% lower following Friday's close on Wall Street.
In Europe, the region-wide Stoxx 600 index closed 0.25% lower in Frankfurt, with Britain's FTSE 100 down 0.27% following a step-up in bond buying from the Bank of England as the pound drifted to 1.10 against the U.S. dollar.
Ford Motor (F) - Get Free Report shares finished down 6.8% after analysts at UBS lowered their rating and price target on the carmaker citing the risk of waning demand amid a looming U.S. recession.
The China Passenger Car Association (CPAC) said Tesla delivered 83,155 cars last month, an 8% increase from August that crushed the group's previous best of just under 79,000 recorded in June.
Apple (AAPL) - Get Free Report shares rose 0.24% following a report that suggested the tech giant was able to buck the trend of cooling personal computer demand with solid third quarter MacBook shipments.
The International Data Corporation's closely-tracked survey showed global PC shipments fell 15% from last year to around 74.3 million units, lead by a 27.8% decline for HP Inc. (HPQ) - Get Free Report. Apple, however, notched a 40.2% gain for the three months ending in September, with shipments rising to just over 10,000 units of is Mac personal computers.
Questions remain, however, over the nature of the funding required to reach the $44 billion price tag, with banks on the hook for around $12.5 billion in loans and Musk himself having raised around $15.4 billion from the sale of Tesla shares.