Stocks Struggle to Regain Momentum as China Data Weighs on Investors' Minds

U.S. stocks showed marginal gains in Monday morning trading, attempting to overcome disappointing data concerning China's economy, which had a dampening effect on risk sentiment in global markets.

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Here's a breakdown of the market movements:

• The Dow Jones Industrial Average (DJIA) increased by 16 points, or less than 0.1%, reaching 34,525.
• The S&P 500 rose by 6 points, or 0.1%, to 4,512.
• The Nasdaq Composite gained 62 points, or 0.5%, reaching 14,177.

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During the previous week, the Dow rose by 2.3%, the S&P 500 gained 2.4%, and the Nasdaq Composite experienced a significant jump of 3.3%. These figures mark the largest weekly percentage gains for the Dow and Nasdaq since March, while the S&P 500 recorded its most substantial weekly rise since mid-June, according to Dow Jones Market Data.

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The cautious tone prevailing in global markets was influenced by disappointing news from China, which revealed that the world's second-largest economy grew by only 0.8% in the second quarter compared to the previous three months. This growth rate represents a significant slowdown from the 2.2% increase in the first quarter. Year-over-year growth stood at 6.3%, falling short of the forecasted 7.3%.

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Traders now face the decision of interpreting the news in a positive light, considering the possibility of increased stimulus measures from Beijing.

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"While weak growth means that the government and the People's Bank of China (PBOC) will step up efforts to further ease financial conditions and pave the way for a quicker recovery," said Ipek Ozkardeskaya, senior analyst at Swissquote Bank. "Supportive policies put in place so far have had little impact. The Chinese property downturn, risk of disinflation, and falling exports have been difficult to reverse. As a result, the knee-jerk reaction in markets was unenthusiastic."

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This risk-off sentiment was evident in the performance of industrial commodities sensitive to perceptions of Chinese demand, with oil and copper prices experiencing declines.

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Meanwhile, the U.S. second-quarter earnings season is entering a relatively quieter phase on Monday following the significant bank earnings reported on Friday. Companies such as First Bank and Home Bank are among those releasing their results.

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