The Dow clung to gains and logged a fourth up day in a row Monday, even as the stock market ran out of steam between the opening and closing bell.
The broadly positive sentiment from late last week initially carried over into the new week in early trading, but stocks soon gave up their gains. All three major indexes were negative at one point. The Dow closed up 38 points, or 0.1%, but the S&P 500 finished flat in negative territory. The Nasdaq Composite slipped 0.2% on the day.
In bonds, the 10-year Treasury yield jumped higher, moving to a high of 1.635%, a level not seen since mid-August, according to Refinitiv.
The trade war showed up in Chinese economic data. Beijing reported some worse-than-expected trade trade for August, showing its trade surplus dropping and exports to the United States lower.
Oil prices climbed higher on Monday after Saudi Arabia replaced its energy minister with Crown Prince Mohammed bin Salman's half brother. US oil prices settled 2.4% higher at $57.85 a barrel, according to CME.
Stocks finished higher last week, following the August jobs report that showed fewer jobs than expected were added to the US economy, while wage growth ticked up and the unemployment rate stayed stable.
The ailing manufacturing sector added just 3,000 new positions last month. The US economy has been carried by consumers, but recent data shows that the trade war is beginning to weigh on people's minds. Against this backdrop, investors will be paying close attention to the University of Michigan consumer sentiment survey for September on Friday at 10 am ET.
"History suggests that recessions typically see declines in both manufacturing and services sectors. Even then, while readings below 50% certainly do not feel comfortable, it often takes levels materially below 50% (perhaps in the 40%--45% range) to signal meaningful downturns in economic activity," wrote the investment strategy team at Glenmede Trust Company in emailed comments.
The biggest items on the economic calendar this week are happening on Thursday: A report on US consumer price inflation is due at 8:30 am ET and the European Central Bank's policy update at 7:45 am ET. Market participants expect some form of stimulus or at least guidance on monetary policy direction after the central bank meeting.