What drove markets

Stocks struggled to hang on to opening gains even after data showed U.S. durable-goods orders rose by 0.7% in May, versus forecasts for a 0.2% rise, and pending home sales rebounded last month, reversing a six-month decline. Investors were caught between recession and inflation fears.

“We’re going to be dealing with this push-and-pull for some time to come now,” Dan Eye, chief investment officer at Fort Pitt Capital Group, said via phone. “I don’t think we can expect to see a situation where inflation comes down significantly without a pretty significant slowdown in economic growth.”

Strategists at Credit Suisse said bond yields may have seen their peak, particularly for Treasury-inflation protected securities, which in turn could mean the dollarDXY is close to its summit. They say their lead indicators are consistent with 0% GDP growth, as evidenced by the collapse in housing affordability, the weakness of corporate confidence and the weakness in the employment gauge of the Institute for Supply Management manufacturing index.

Stocks had bounced last week in a move analysts credited to expectations that a slowing economy could see the Federal Reserve hike rates less aggressively than previously expected. Fed Chairman Jerome Powell warned lawmakers that achieving a so-called soft landing for the economy as the Fed tightens interest rates would be “very challenging.”

“Global growth and inflation concerns are keeping investors up at night,” said BlackRock Investment Institute’s Jean Boivin and others, in a Monday note. At a June 14-15 semiannual meeting for BlackRock’s portfolio managers and executives, “concerns over a global growth slowdown weighed on participants as a stampede of central banks raised rates in an effort to rein in inflation.” 

“Most attendees said they expect to see short cycles, more macro volatility and volatile markets,” Boivin and others wrote.

Group of Seven economic powers met in Germany where they underscored their commitment to Ukraine for the long haul with plans to pursue a price cap on Russian oil.

Companies in focus

Frontier Airlines parent Frontier Group Holdings Inc.
ULCC,
-11.20%
issued a letter to Spirit Airlines Inc.
SAVE,
-7.95%
shareholders, urging them to support the air carriers’ agreed upon merger deal. In the letter, Frontier Chairman William Franke and Chief Executive Barry Biffle said the recently amended Frontier-Spirit deal offers Spirit shareholders value “well in excess” of JetBlue Airways Corp.’s
JBLU,
+1.62%
“illusory proposal, which lacks any realistic likelihood of obtaining regulatory approval.” Frontier shares finished down by 1.21%, while Spirit shares closed 8% lower and JetBlue shares gained 1.6%.

Shares of Robinhood Markets Inc.
HOOD,
+14.00%
shares finished 14% higher after the crypto exchange FTX denied conversations with Robinhood about a potential merger or acquisition deal with the trading app, following an earlier news report detailing internal talks at FTX about a potential deal from Bloomberg.

Other assets

The yield on the 10-year Treasury note
TMUBMUSD10Y,
3.210%
rose 6.8 basis points to 3.193%. Yields and debt prices move opposite each other.

The ICE U.S. Dollar Index
DXY,
-0.23%
edged down 0.2%.

Bitcoin
BTCUSD,
-0.21%
fell 2.2% to trade near $20,915.

Oil futures scored a second gain in a row, with West Texas Intermediate crude for August delivery
CLQ22,
+2.04%
rising $1.95, or 1.8%, to settle at $109.57 a barrel on the New York Mercantile Exchange.

August gold futures lost $5.50, or 0.3%, to settle at $1,824.80 an ounce.

The Stoxx Europe 600
SXXP,
+0.52%
finished 0.5% higher, while London’s FTSE 100
UKX,
+0.69%
gained 0.7%.

The Shanghai Composite
SHCOMP,
+0.88%
ended 0.9% higher, while the Hang Seng Index
HSI,
+2.35%
jumped 2.4% and Japan’s Nikkei 225
NIK,
+1.43%
rose 1.4%.

— Steve Goldstein contributed to this article.