GLOBAL MARKETS-Wall Street shares mostly flat as inflation, rates weigh

GLOBAL MARKETS-Wall Street shares mostly flat as inflation, rates weigh

Oil was up nearly 2%, off multi-month lows.

Aug 8 Reuters -- Wall Street shares were mostly flat on Monday, the dollar weakened and the U.S. government bond yield fell as investors weighed mixed messages on inflation and how aggressive the Federal ReserveFederal Reserve might be in combating it.

The Dow Jones Industrial Average rose just 0.09% on the day, while the S&P 500 lost 0.12% and the Nasdaq Composite fell 0.1%.

Nvidia Corp, whose stock fell by around 6%, said on Monday that it would drop its second-quarter revenue by 19% from the previous quarter due to weakness in its gaming business.

The broad Euro STOXX 600 finished up around 0.75% on Monday, led by cyclical and growth stocks, helping it recover losses from Friday. The MSCI world equity index, which tracks shares in 47 countries, added just 0.15%.

The threat of a recession seems remote with labor market strength, but concerns over how aggressive the Federal ReserveFederal Reserve could be hovering over the market, said Quincy Krosby, chief global strategist for LPL Financial, in an email.

There was a focus on higher interest rates for investors.

Unexpectedly strong U.S. jobs data last week increased the stakes for the July U.S. consumer prices report due on Wednesday, which could see further inflation and more aggressive Federal Reserve interest rate hikes.

According to the U.S. government data, business investment appeared to be an early victim of rising prices and rates.

The New York Federal ReserveFederal Reserve survey showed that the U.S. consumers' expectations for inflation will be in a year and in three years fell sharply in July, a win for policy makers.

The rise in inflation and the reaction of the Fed have been a real problem for valuations this year, according to Morgan Stanley strategists in a note on Monday. It has also been a tailwind for earnings. We're on the other side of the mountain, and operating leverage is likely to be more than the consensus expects. Inflation stays above the Fed 2% target through next year, BlackRock Investment Institute strategists wrote in a note on Monday. We think the Fed will keep responding to calls to tame inflation until it recognizes how that would stall growth. The U.S. dollar dropped close to 0.2% against a basket of six major currencies to 106.4 in foreign exchange markets, giving up some gains after strengthening on the jobs boom and the jump in yields.

Analysts were bullish about the U.S. currency's prospects.

Data like this will further any thoughts about the U.S. Alan Ruskin, global head of G 10 FX strategy at Deutsche Bank, said that the US jobs statistics is very positive and that the USD is very positive against all currencies.

It is a barometer of risk appetite and gained by using cryptocurrencies likeBitcoin and other criptocurrencies. The last time that happened was at $23,942, it was up 3.25%.

On Monday, gold broke higher as the dollar and Treasury yields retreated. Spot gold rose 0.8% to $1,788 per ounce after dropping 1% in the previous session. The U.S. gold futures were 0.76% higher at $1,786.

Oil prices rebounded on Monday but were still near their lowest levels in volatile trading as positive economic data from China and the United States spurred hopes for demand growth despite recession fears.

U.S. crude was up 1.79% to $90.59 per barrel and Brent was at $96.40, up 1.59% on the day.