Stocks seesawed Monday but managed to maintain the momentum from late last week as investors braced for key inflation data.

The S&P 500 ended flat, up a mere 0.23 points, at 5,344.39. All day, the broad-based index had alternated between small gains and losses. The Nasdaq Composite advanced 0.21% to close at 16,780.61. Shares of Nvidia gained 4% to help the technology-heavy index climb. The Dow Jones Industrial Average pulled back 140 points, or 0.36%, at 39,357.01.

The forthcoming batch of inflation data will be essential for markets that remain jittery following increased volatility. Wednesday's consumer price index report for July will be a pivotal clue as to the health of the U.S. economy, and determine if investors will remain uneasy following July's weak nonfarm payrolls report that contributed to the recent sell-off.

"We are optimistic that a short-term bottom was put in place, or came close to being put in place, on August 5th," said RBC Capital Markets head of global equity strategy Lori Calvasina, noting important technical levels were held after the S&P 500's sell-off last week.

The major averages are coming off slight weekly losses, but they recovered the lion's share of the pullback seen early last week.

Wall Street is watching for the July producer price index report on Tuesday. July retail sales are also due out Thursday.

S&P 500 closes flat, traders await inflation data

The S&P 500 notched a small gain to close higher on Monday as investors struggled to carry over an uptick in momentum from last week ahead of key inflation data.

The broad market index inched up less than 1% to finish at 5,344.39. The Nasdaq Composite gained 0.21% to 16,780.01, while the Dow Jones Industrial Average slipped 140 points, or 0.36%, to close at 39,357.01.

— Brian Evans

Nvidia shares can rise back to $120 in short term following retreat, Grasso says

Nvidia shares can return to $120 in the near term, according to Grasso Global CEO Steve Grasso.

"This is definitely a momentum stock," Grasso said on CNBC's "The Exchange." "And I think you're going to see a 120 frame sooner rather than later."

He noted it was a "blink of an eye" away from $115 in Monday's session.

Some investors have grown wary about the artificial intelligence trade amid a recent route after the monster runs seen earlier this year. Nvidia has dropped more than 11% in the third quarter, but is still up 121% on the year. Still, Nvidia finished last week more than 25% off its 52-week high.

Grasso said Nvidia has large market share and "sound" fundamentals. But he did acknowledge that the broader market would likely need to perform well for Nvidia to return to that $120 level.

"I think you're going to see higher prices," he said. But, "I think the market has to perform well."

— Alex Harring

Communication services sector looks attractive between now and year-end, says Wells Fargo's Chris Harvey

Wells Fargo Securities' head of equity strategy Chris Harvey sees strong opportunities in the communication services sector in the latter half of 2024.

"You did see a correction. You have good valuations, good fundamentals, and positive momentum and I think you can make money between here and year-end in that [communication services] space and in a lot of those names," Harvey said Monday on CNBC's "Squawk on the Street," adding that the sector now has a good risk/reward ratio. 

Communication services has gained about 19.7% year to date, the most of any sector. The S&P 500, by comparison, is up roughly 12% this year.

Harvey also noted that now is not the time for investors to dip into the "contrarian basket" of small-cap stocks even after the rush into those names in July, given that those names are high-risk plays that lack strong underlying fundamentals.

— Pia Singh

Morgan Stanley's Aaron Dunn gets bullish on utilities

Aaron Dunn, Morgan Stanley Investment Managements' senior equity portfolio manager, believes there is going to be an inflection point in the demand in utilities, boosting the industry.

"We're on the precipice of this demand in electricity use in this country, whether it be datacenter related," Dunn said on CNBC's "The Exchange." "All the investment that has to happen for that to occur is also very interesting."

The S&P 500 utilities sector is up 15.6% year to date, slightly outperforming the broader market's 12% return.

— Yun Li

This is a 'pretty good' backdrop for equities, macro director says

Even with last week's market slide, the setup for equities is still favorable, according to Jurrien Timmer, director of global macro at Fidelity Investments. He cited the accelerating earnings growth, as well as the likelihood of rate cuts this year, as supportive of the market.

"All in all, it's a pretty good backdrop for equities," Timmer told CNBC's "Money Movers" on Monday. "Notwithstanding the wobbles that we've seen in recent weeks."

— Sarah Min

Budget deficit jumps in July, now more than $1.5 trillion for the year

The federal government's red ink for 2024 eclipsed $1.5 trillion in July as a jump in Medicare expenses and the continued burden of high interest rates darkened the U.S. fiscal picture.

With a $243.7 billion shortfall on the month, the total budget deficit for the year jumped to $1.52 trillion, helping push federal debt to $35.1 trillion. The June deficit was just shy of $71 billion.

Medicare costs surged to $92 billion for the month, more than four times what they were in June.

Net interest payments, or the difference between what the government pays debt holders and what it collects on investments, totaled $81 billion and is now at $763 billion for the year, ahead of all other categories except Social Security.

— Jeff Cox

Oppenheimer remains overweight on U.S. equities

Volatility will persist as monetary policy begins to normalize, according to Oppenheimer chief investment strategist John Stoltzfus. While the process "isn't always a smooth journey," he is maintaining his overweight position on U.S. equities.

"We remain positive on equities with expectations for a continued broadening of the rally that emerged from the lows last October," Stoltzfus wrote in a Monday note. Earnings growth has provided a positive boost, per Stoltzfus.

Looking ahead, the strategist believes geopolitical tensions and domestic policy debates will play more of a role in market movement as the U.S. presidential election approaches.

— Hakyung Kim

Shares of bitcoin miner Marathon Digital slide

Shares of Marathon Digital, one of the largest bitcoin mining stocks, dropped after the company proposed a private offering of $250 million of convertible senior notes due 2031.

The shares were last lower 8%.

Marathon said it plans to use the net proceeds from the sale to acquire more bitcoin, as well as for general corporate purposes. The stock is down more than 30% in 2024. The price of bitcoin is up 40% for the year.

— Tanaya Macheel

Tech titans still set market tone, TS Lombard says

While the yen carry trade unwind and health of the economy are front of mind for investors, investment research firm TS Lombard still sees megacap technology as driving the market.

"Make no mistake, it is still the US tech giants that set equities' tone," Konstantinos Venetis and Davide Oneglia wrote to clients. "Their weight — in terms of market cap, earnings and profit margins — is simply too heavy to allow a sustained broad market divergence at this stage."

The pair also cautioned investors for more volatility in the near term. That is because of the high bar for earnings and multiples, they said, as well as the upcoming presidential election.

— Alex Harring

U.S. crude oil rallies nearly 3% as Pentagon dispatches more forces to Middle East

U.S. crude oil futures rose nearly 3% to top $79 per barrel, as the Middle East braces for a new round of hostilities between Iran and Israel.

The West Texas Intermediate contract for September jumped $2.30, or 2.99%, to $79.14 per barrel. The Brent October contract gained $1.88, or 2.36%, to $81.54 per barrel.

U.S. Secretary of Defense Lloyd Austin has ordered a carrier strike group to accelerate its deployment to the Middle East. Austin has also dispatched a guided-missile submarine to the region.

Tensions have been rising in the region since the assassination of a Hamas leader in Tehran.

Israel has put its military on high alert, a person familiar with the matter told The Wall Street Journal. Israeli intelligence has assessed Iran is likely to respond directly to the killing of the Hamas leader within days, two sources with direct knowledge told Axios on Sunday.

— Spencer Kimball

Stocks and volatility index move inversely

The market appears to rally at points during Monday's session when the Cboe Volatility Index, or VIX, drops below 20. When the so-called fear gauge of Wall Street rises back above that level, stocks take a leg down.

Here is how the VIX and S&P 500 have moved over the course of the trading day:

— Alex Harring

BofA's Subramanian highlights large-cap value stocks

Investors should look at large-cap value stocks in the hunt for places to put money to work, according to Savita Subramanian, head of U.S. equity strategy at Bank of America Securities.

'We're at a point where you don't necessarily want to sell the market wholesale, you want to pick your spots," Subramanian said on CNBC's "Squawk on the Street." "I really like large-cap value stocks here. I think that's an area of the market that's underappreciated and is poised to do quite well in the months, if not years, to come."

Subramanian acknowledged that this cohort usually requires growth in the economy to outperform. She said traders should look for signs of this in places such as manufacturing or infrastructure programs, rather than consumer spending or service demand.

The strategist said it also makes sense to look at stocks with a cyclical tilt within the space. Specifically, she pointed to industrials, financials and materials as areas to consider.

— Alex Harring

Stocks making the biggest moves midday

Here are the stocks on the move midday:

• JetBlue — Shares sank 13% after the airline said it plans to sell $400 million of five-year convertible senior notes.
• Hawaiian Electric Industries — Shares plummeted more than 16% after the utility said it does not yet have a financing plan for the $1.7 billion Maui windstorm and wildfire settlement payment. Hawaiian Electric also reported a consolidated net loss of $1.3 billion, or $11.74 per share, in the second quarter, including charges for goodwill impairment. Last year, the company posted a net income of $55.1 million during the period.
• KeyCorp — The Cleveland-based regional bank surged 13% after The Bank of Nova Scotia agreed to take a minority position, making KeyCorp the top performer in the S&P 500 Monday. Under the terms of the deal, Key will receive about $2.8 billion in cash, while Scotiabank will eventually get a 14.9% stake in the lender.

Read the full list here.

— Sean Conlon

Stocks likely to be volatile in near term, but backdrop still ‘constructive,’ says UBS

While UBS sees more market volatility ahead, the firm thinks the backdrop for stocks continues to be "constructive."

"Equity market volatility has increased amid concerns about the U.S. economic outlook and mixed results from big tech companies," the firm wrote in a Monday note. "But while various economic and geopolitical risks remain, we believe solid earnings growth, the prospect of lower interest rates, and rising investment in AI continue to create a constructive backdrop for equities."

Against a cooling inflation outlook, UBS also expects the Federal Reserve to cut interest rates by 100 basis points by the end of this year.

— Sean Conlon

Nvidia rises, stands out on Monday

Shares of artificial intelligence favorite Nvidia advanced 5% higher on Monday and helped propel the Nasdaq Composite higher.

Investors also await the company's second-quarter results on Aug. 28.

— Brian Evans

Small-cap stocks slump in morning trading

Small-cap stocks have stumbled out of the gate to start the week, with the Russell 2000 down 0.6% Monday morning.

The small-cap index is now up about 1% in the third quarter, losing most of its gains from the market rotation in July.

— Jesse Pound

Stocks open higher

Stocks opened higher on Monday as traders look to forthcoming inflation data for clarity after recent market volatility.

The S&P 500 added 0.25%, while the Nasdaq Composite climbed 0.27%. The Dow Jones Industrial Average ticked up 57 points, or 0.15%.

— Brian Evans

Cleveland's KeyCorp surges 20% premarket after Bank of Nova Scotia takes minority stake

Cleveland-based KeyCorp. jumped more than 20% premarket Monday after Canada's Bank of Nova Scotia agreed to buy what will eventually be a 14.9% minority stake for $2.8 billion, or $17.17 per share. KeyCorp. closed Friday at $14.61.

The move may give a boost to regional bank stocks Monday, which suffered in 2023 as higher Federal Reserve interest rates drove down the value of their bond holdings and led some depositors to flee, helping lead to the failure of Silicon Valley Bank and Republic Bank. Scotiabank's investment may also help boost investor sentiment toward the sustainability of KeyCorp.'s dividend. The bank yielded 5.6% at Friday's close.

KeyCorp. will use Scotiabank's involvement to boost its investment banking, payments and wealth management businesses, CEO Chris Gorman said in a statement. KeyCorp's CET1 capital ratio will stand at 11.3% to 11.6% after the capital injection, which will add a "low single-digit" boost to 2025 earnings per share and be slightly accretive to 2026 earnings per share, the bank said. 

KeyCorp., up 1.4% in 2024 through Friday, will also use the BNS stake as part of a plan "to evaluate a potential repositioning of the available-for-sale securities portfolio with the objective of accelerating the timing of expected profitability, liquidity and capital improvements." 

— Scott Schnipper

Starbucks shares jump after Starboard Value reportedly takes stake

Shares of Starbucks jumped 2.6% in premarket trading after The Wall Street Journal reported that activist investor Starboard Value built a stake in the coffee chain.

Jeff Smith's Starboard is urging Starbucks to take steps to boost its stock price, the Journal reported, citing people familiar with the matter. 

— Yun Li

Stocks making the biggest premarket moves

Here are some of the names moving before the bell:

• KeyCorp — Shares soared 22% after the Cleveland-based regional bank announced a minority investment from The Bank of Nova Scotia. Scotiabank will get 14.9% of KeyCorp's common stock for roughly $2.8 billion in cash as part of the deal.
• Starbucks — The stock moved nearly 3% higher after The Wall Street Journal reported activist investor Starboard Value took a stake in the coffee chain in an effort to boost its stock price value.
• JetBlue Airways — Shares sank 8% after the airline said it plans to offer $400 million of convertible senior notes due in 2029.

To see more premarket movers, read the full story here.

— Michelle Fox

Goldman says 'leverage, crowding and poor liquidity' aided the volatility last week

Goldman Sachs says other factors contributed to the extreme market volatility last week.

The firm stated in a Friday note:

"A combination of leverage, crowding, and poor liquidity likely exacerbated market moves this week. Investors have focused on the yen carry trade as one source of volatility, and our colleagues in GS Prime Services highlighted large selling of Japanese equities by hedge funds, CTA de-levering, and asset manager futures liquidation as key flows during the sell-off. At the same time, equity bid-ask spreads and futures top of book depth have reflected a deterioration in liquidity. Liquidity shocks are typically associated with increased volatility."

The Cboe Volatility Index jumped to levels not seen since the onset of the Covid-19 pandemic in 2020 and during the Great Financial Crisis in 2008. Yet, the S&P 500 at the depths of the sell-off last week did not reach official 10% correction territory. This left many market observers such as Goldman confused and led them to believe there were other factors at work other than just some slightly disappointing data.

— John Melloy

Market rebound faces several obstacles, Vital Knowledge says

The path higher for stocks after last week's moves will get much tougher, according to Adam Crisafulli of Vital Knowledge.

"Bulls reasserted themselves toward the end of last week, but the recent rebound faces myriad obstacles in the coming days, including aforementioned geopolitical risks along with Jul-end earnings (HD kicks off the season Tues morning followed by CSCO Wed night and DE/WMT before the Thurs open), the Jul CPI, and the latest weekly claims report," he said in a note.

"There has been some concern ahead of the CPI as the consensus is looking for an acceleration in the sequential number (+0.2% M/M for both headline and core), although the Y/Y core figure is expected to tick down modestly (to +3.2% vs. +3.3% in June) and regardless, it's very unlikely inflation derails a Sept rate cut," he added.

— Fred Imbert

Europe stocks open higher

European markets opened higher on Monday, with the regional Stoxx 600 index up 0.3% at 8:26 a.m. London time, continuing a steady rebound from last week's sell-off.

The U.K.'s FTSE 100 was up 0.56%, with France's CAC 40 and Germany's DAX up 0.23% and 0.36%, respectively.

— Jenni Reid

Bank of America CEO Moynihan calls for a Fed rate cut

Bank of America CEO Brian Moynihan said U.S. consumers could become discouraged if rates don't drop soon, when speaking to CBS.

"They've told people rates probably aren't going to go up, but if they don't start taking them down relatively soon, you could dispirit the American consumer," he said. "Once the American consumer really starts going very negative, then it's hard to get them back."

He also said consumers are still spending, but that spending growth has slowed to about half the rate seen this time last year.

"The consumer has slowed down," he said. "They have money in their accounts, but they're depleting a little bit. They're employed, they're earning money, but … they've really slowed down."

— Tanaya Macheel

Crypto consolidation resumes amid market volatility

Cryptocurrencies slid Sunday evening as the market struggled to find its footing.

Bitcoin's pullback began early but intensified at about 4:30 p.m. ET. The cryptocurrency was last lower by 4% at $58,329.00, according to Coin Metrics. It bounced back above the $60,000 level at the end of last week. Ether fell 2% to $2,543.03.

"Bitcoin is still consolidating after a period of high volatility due to macro forces and volatility in the equities market," said Steven Lubka, head of private clients and family offices at Swan Bitcoin. "I don't see today's selloff as anything other than traders being nervous as equities open back up on Monday and bitcoin consolidating in a technical range after a 12% move up."

Crypto-related stocks were little changed.

— Tanaya Macheel

Stock futures open flat

U.S. equity futures opened flat Sunday evening as investors braced for key inflation data.

Futures tied to the Dow Jones Industrial Average were lower by less than 0.01%. S&P 500 futures were down 0.09% and Nasdaq 100 futures dipped 0.14.

— Tanaya Macheel