(Bloomberg) -- US stocks struggled for direction in subdued trading Monday as investors weighed the risk of a recession finally ending the Federal Reserve’s policy tightening. Treasuries yields rose amid a pick up in corporate issuance.

Most Read from Bloomberg

• Texas Mass Shooting’s Bloody Images Add to Fervor in Gun Debate

• Powell’s Bet Against Recession Looks Good — Minus the Credit Crunch and a DC Standoff

• Football Stadiums Belong in the Suburbs

• Biden Trails Trump as His Approval Rating Hits Low in ABC Poll

• Why Airfares, Hotels and Cars Are Getting So Expensive for Americans

The S&P 500 wavered between gains and losses on trading that was 10% below the 30-day average at this time of day. The gauge had jumped 1.9% Friday to halt its longest losing streak since February. The Nasdaq 100 reversed early losses as AI-capable chipmakers Advanced Micro Devices Inc. and Nvidia Corp. advanced alongside Google-parent Alphabet Inc.

A gauge of the dollar slipped for a fifth straight day while gold climbed. The yield on the policy sensitive two-year Treasury rose to 3.96% as syndicate desks brace for corporate bond sales volume of as much as $35 billion this week.

“US banking sector stress and a looming debt ceiling deadline elevate near-term recession risk,” Marko Kolanovic, JPMorgan Chase & Co.’s chief strategist said. “Absent a disruptive event, we expect a US recession dynamic will take hold gradually and won’t create space for pre-emptive Fed easing this year.”

US stocks have traded sideways since the beginning of April as better-than-feared corporate earnings offset concerns around an economic slowdown and the health of regional banks. PacWest Bancorp was the only bank in the KBW Regional Banking Index trading higher in the afternoon session.

Investors are waiting on the Fed’s Senior Loan Officer Opinion Survey for any sign of a credit crunch. Although, “it may be too soon for any significant credit tightening to show up just yet,” according to Win Thin, global head of currency strategy at Brown Brothers Harriman.

Swaps traders are optimistic the Fed is prepared to pause as contracts suggest interest-rate cuts will start as early as the central bank’s July meeting, with at least two quarter-point cuts by year-end.

“Persistently strong economic data suggests that such a significant pivot in Federal Reserve sentiment is unlikely,” said Seema Shah, chief global strategist at Principal Asset Management. “The conditions necessary for the Fed to pivot and cut rates are dismal, requiring a desperately struggling economy or a financial crisis. Investors: be careful what you wish for.”

Consumer-inflation data Wednesday may provide further clues on the Fed’s rates path as well set the tone for equities.

“Traders will be looking to see if this week’s inflation numbers will be able to push stocks out of their recent consolidation. The S&P 500 hasn’t had a weekly gain or loss of at least 1% since March—its longest stretch in nearly two years,” Chris Larkin, managing director of trading and investing at E*Trade Financial said.

Tech Sector

Tech stocks have been trading at a 49% premium to the rest of the S&P 500, according to a Goldman Sachs analysis. Sector bulls argue that valuation premium is supported by earnings growth outlook and a macro backdrop of slowing GDP growth and declining interest rates.

“However, if the economic outlook improves and rates rise, further valuation expansion will be challenging, and more cyclical stocks will likely outperform,” the bank’s strategists led by David Kostin wrote. “If the economy enters a recession, the popularity of mega-cap tech in hedge fund long portfolios leaves the stocks vulnerable.”

Debt Ceiling Stalemate

The rout in US bank shares has the S&P 500 financials index on the verge of falling back below its 2007 peak.

Meanwhile, Treasury Secretary Janet Yellen sees “simply no good options” for solving the debt limit stalemate in Washington without Congress raising the cap. She even cautioned that resorting to the 14th Amendment would provoke a constitutional crisis.

“The deficit ceiling is a political football and since 2024 is an election year, both sides are seeking to score political points,” Louis Navellier, chief investment officer of Navellier & Associates, said. “However, the Biden Administration has the most to lose, so it will be interesting if there will be any caps on federal spending. As long as Treasury bond yields do not panic, investors should not panic either.”

Elsewhere in markets, oil gained as investors assessed a complex outlook for global demand after a period of volatile trading. Bitcoin slipped below $28,000.

Key events this week:

• US President Joe Biden scheduled to meet with congressional leaders on debt limit, Tuesday

• New York Fed President John Williams speaks to Economic Club of New York, Tuesday

• US CPI, Wednesday

• China PPI, CPI, Thursday

• UK BOE rate decision, industrial production, GDP, Thursday

• US PPI, initial jobless claims, Thursday

• Group of Seven finance minister and central bank governors meet in Japan, Thursday

• US University of Michigan consumer sentiment, Friday

• Fed Governor Philip Jefferson and St. Louis Fed President James Bullard participate in panel discussion on monetary policy at Stanford University, Friday.

Some of the main moves in markets:

Stocks

• The S&P 500 was little changed as of 1:17 p.m. New York time

• The Nasdaq 100 rose 0.1%

• The Dow Jones Industrial Average fell 0.3%

• The MSCI World index rose 0.2%

Currencies

• The Bloomberg Dollar Spot Index was little changed

• The euro was little changed at $1.1027

• The British pound was little changed at $1.2644

• The Japanese yen was little changed at 134.73 per dollar

Cryptocurrencies

• Bitcoin fell 3.6% to $27,904.94

• Ether fell 3% to $1,862.52

Bonds

• The yield on 10-year Treasuries advanced six basis points to 3.50%

• Germany’s 10-year yield advanced three basis points to 2.32%

• Britain’s 10-year yield advanced 13 basis points to 3.78%

Commodities

• West Texas Intermediate crude rose 2.5% to $73.09 a barrel

• Gold futures rose 0.5% to $2,034.90 an ounce

This story was produced with the assistance of Bloomberg Automation.

--With assistance from Vildana Hajric and Edward Bolingbroke.

Most Read from Bloomberg Businessweek

• Why Launch Rockets When You Can Just Fling Them Into Space?

• Even $500 Million a Year From Google Isn’t Enough to Save Firefox

• Biden Administration Tamps Down Talk of US-China Decoupling

• Airbus Bets on a Stretched A220 Jet to Beat Boeing’s 737

• Data Science Is the Hot New Master’s at B-Schools

©2023 Bloomberg L.P.