Stock Market Rises After Weekly Loss

Investors are still trying to balance the positive signs from the jobs report against more cautious recent economic commentary from executives like Tesla’s Elon Musk and JP Morgan’s Jamie Dimon, said AvaTrade chief market analyst

Naeem Aslam.

On top of the jobs market, investors are also watching economic data closely for clues about the Federal Reserve’s path for raising interest rates. Fears that the Fed could aggressively raise rates and potentially drive the economy into recession have stoked volatility in global markets this year. 

While traders and consumers alike are looking for signs that inflation has peaked, the real issue is when inflation will come down to a more neutral rate and how much the Fed and other central banks will have to raise interest rates to get it there, said

Siddharth Singahi,

chief investment officer at IronHold Capital.

A key test for markets will be Friday’s U.S. consumer-price index. The closely watched inflation gauge is expected to rise 8.2% in May from a year earlier, according to economists surveyed by The Wall Street Journal. Excluding food and energy, price growth is expected to cool slightly to an annual rate of 5.9% in May from 6.2% the previous month.

Fed officials have indicated they plan to raise interest rates by half a percentage point at next week’s policy meeting, and by the same amount again in July. If they need to do more, Mr. Singahi said, he believes they will, no matter the market reaction.

“Until that’s resolved, not much is going to change for the market fundamentally,” he said.

Trading has been quieter in recent weeks as investors gear up for coming central bank decisions and crucial economic data. The Dow industrials fell 0.9% last week, the smallest weekly change for that index in about a month. The S&P 500 lost 1.2% last week while the Nasdaq ended down 1%.

“We seem to be in a kind of wait-and-see mode,” said

Craig Erlam,

senior market analyst at Oanda in London. “We’ve entered a phase where a lot of interest-rate increases are priced in. A lot of growth slowdown is priced in. We are still seeing intraday volatility, but it does seem to have stabilized.”

Shares of

Spirit Airlines

rose 6.1% after

JetBlue Airways

sweetened its offer to buy the company. JetBlue in May launched a hostile takeover of Spirit, which had already agreed to a merger with

Frontier Airlines.

Spirit’s shareholders are set to vote on the Frontier merger proposal on Friday. Shares of JetBlue rose 2%, while Frontier Group shares rose 2.6%.

Tesla

shares rose 1.3%, partially recovering from a 9.2% fall on Friday after Mr. Musk, its chief executive, said the electric vehicle maker would cut 10% of its salaried workforce, citing concerns about the global economy. Mr. Musk on Monday threatened to terminate his deal to buy

Twitter Inc.,

shares of which fell 3.7%.

Amazon.com

shares rose 2.9% to $127.12. Monday will mark the first day of trading since the company executed a 20-for-1 stock split. Before the split, Amazon shares were $2,447 a share.

Shares of

Keurig Dr Pepper

rose 4.4%, while

VICI Properties

rose 4.7% and

ON Semiconductor

rose 5.3% after S&P Dow Jones Indices said the three companies will join the benchmark S&P 500 index this month.

U.S. crude oil slid 0.3% to $118.45 a barrel. Prices for oil have surged this year as Russia’s war in Ukraine has disrupted global commodity markets. The average price of regular gas in the U.S. rose to $4.86 over the weekend, according to AAA.

In the bond market, the yield on 10-year U.S. Treasurys jumped to 3.028%, from 2.940% Friday, as investors sold government bonds. Yields and bond prices move inversely. Bond yields have been on the rise in recent weeks but remain below their recent high of 3.124% set in early May.

Overseas, the British pound rose 0.4% against the U.S. dollar to $1.2539 as Prime Minister

Boris Johnson

is set to face a vote of confidence in his leadership on Monday. Mr. Johnson’s poll ratings have fallen amid revelations that he held parties in Downing Street during Covid-19 lockdowns.

The U.K.’s FTSE 100 rose 1.4% after being closed since Wednesday due to the four-day Platinum Jubilee weekend, celebrating Queen Elizabeth II’s 70 years on the throne. 

The pan-continental Stoxx Europe 600 rose 1.2%. Investors in Europe will be watching the European Central Bank’s policy meeting on Thursday, where it is expected to lay out its plans for unwinding bond purchases and raising interest rates. The ECB is expected to raise rates for the first time in 11 years in July as it seeks to contain surging inflation.

Asian markets rallied as China continued to ease Covid-19 restrictions in major cities. China’s Shanghai Composite rose 1.3% while Hong Kong’s Hang Seng Index gained 2.7%. Japan’s Nikkei 225 rose 0.6%.

Write to Chelsey Dulaney at chelsey.dulaney@wsj.com and Paul Vigna at Paul.Vigna@wsj.com