U.S. stock indexes were trading higher Monday but were off the best levels of the sessions, as persistent concerns about the spread of the COVID-19’s delta variant created an air pocket in what has been an otherwise bullish day for equity markets to start August.

Investors also eyed progress on an infrastructure bill, merger activity and a sign that central-bank stimulus may continue.

What are major indexes doing?

The Dow Jones Industrial Average

rose 38 points, or 0.1%, to 34,973, after touching an intraday high at 35,192.11.

The S&P 500 index

traded up 6 points, or 0.1%, to 4,400, but had touched a Monday peak at 4,422.18.

The Nasdaq Composite Index

gained 60 points, or 0.4%, to trade at 14,731.

Last week, the major indexes dropped, with the S&P 500 losing 0.4% and Nasdaq Composite dropping 1.1%, after the megacap tech companies reported quarterly results. The Dow fell 0.4% last week. The S&P 500 rose 2.3% in August, for its sixth consecutive monthly gain.

What’s driving the market?

Stocks were seeing some choppy price action in Monday’s trade but investors appeared upbeat at the start of trade in August, a seasonally tough time for equities.

Gains to start the dog days of summer are being supported thus far by investors, who are cobfident that the economic expansion will boost corporate profits. However, the spread of the Delta variant of COVID-19 has caused some caution on Wall Street, with the 10-year benchmark Treasury

at multimonth lows around 1.15%.

In One Chart: Stock-market investors are ‘staring down the barrel of seasonal weakness for next 3 months’

“Earnings season is largely over, and the [Federal Open Market Committee] meeting and GDP behind us, markets enter a difficult seasonal period with few catalysts to drive markets higher,” wrote Mark Hackett, Nationwide’s chief of investment research.

“The bond market continues to reflect peak growth and a potential Fed policy error,” he noted.

Investors also are keeping a close eye on China’s efforts to rein in tech firms domiciled in the People’s Republic.

“The stars have aligned for stock markets, with a stellar earnings season being complemented by record-low real yields and hopes that Congress will deliver more fiscal juice soon,” said Marios Hadjikyriacos, senior investment analyst at XM. U.S. senators over the weekend concluded the text of a $1 trillion infrastructure bill.

Read: Will the passing of the ‘performance baton’ keep U.S. stocks moving higher?

In a speech delivered Friday night, Fed Gov. Lael Brainard suggested that the central bank won’t announce a tapering of its bond purchase program at the Jackson Hole gathering at the end of the month. “I expect to be more confident in assessing the rate of progress once we have data in hand for September, when consumption, school, and work patterns should be settling into a post pandemic normal,” she said.

Looking ahead, the September jobs data won’t come until Oct. 8, according to the Labor Department’s calendar of releases, and the next Federal Open Market Committee meeting after that will end Nov. 3.

Meanwhile, a manufacturing survey from the Institute for Supply Management falls to 59.5 in July from 60.6, with the index falling to a 6-month low due to broad supply shortages.

“The ISM manufacturing index stayed well within expansion territory at 59.5 in July—but signals that manufacturing sector growth likely peaked earlier this year,” wrote Oren Klachkin and Gregory Daco, economists at Oxford Economics, in a note.

“Significant supply side challenges remained prevalent as supplier deliveries slowed further and input prices rose at a red-hot pace,” the economists wrote.

The closely followed report comes after IHS Markit’s final reading for manufacturing PMIs in July was 63.4 versus an initial read of 63.1. A reading of 50 or above indicates improving conditions.

A separate report on U.S. construction spending was up 0.1% in June.

Which companies are in focus?

In deal news, Square Inc.

is buying Australia-listed buy-now pay-later company Afterpay Ltd.


for $29 billion in an all-stock deal. Square shares were up nearly 12%.

Parker Hannifin Corp.

said it’s buying U.K. engineering company Meggitt PLC


for $9 billion in cash, a 71% premium to Friday’s close. Shares of Parker Hannifin were down 0.6%.

News Corp.

announced Monday an agreement to buy Oil Price Information Service (OPIS) for $1.15 billion in cash, from S&P Global Inc.

and IHS Markit Ltd.
News Corp is the parent of Dow Jones and MarketWatch, the publisher of this report. Shares of News Corp. were up by about 0.8%, those for S&P Global were up 1.5% and IHS Markit shares were up by about 1.6%.

How are other markets doing?

The yield on the 10-year Treasury note was down 7.4 basis points at 1.16%. Yields and debt prices move in opposite directions.

The ICE U.S. Dollar Index
a measure of the currency against a basket of six major rivals, was off 0.2%.

Oil futures lost ground, with the U.S. benchmark

down 1.2%, while gold futures

edged down 0.2%.

In European equities, the Stoxx Europe 600

closed up 0.6% to notch a record high, while London’s FTSE 100

advanced 0.7%.

In Asia, the Shanghai Composite

jumped 2%, while the Hang Seng Index

rose 1.1% in Hong Kong. Japan’s Nikkei 225

rose 1.8%.

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