Inflation fears are keeping traders back from major investments, as the stock markets closed with little change from the previous day.

The Dow Jones Industrial Average dropped 240 points on Monday, losing 0.60%. The S&P 500 fell as well, by 0.20%. The only major stock index to close up was the Nasdaq Composite, with a 0.11% gain.

While a few stocks are trading at high volumes, most of the market looks to be moving cautiously ahead of economic data for Nonfarm Payrolls. That is the major economic indictor for this week, due out on Friday.

Inflation and Economic Data Keep Trading Light

Inflation is still on the rise, at 3.20%, which increased from January’s 3.10%. That stubborn inflation rate is keeping traders back from making large investments and is creating a mostly sluggish stock market. Some indicators point toward a worsening inflation rate, which would drive trading down further.

So, investors are hopeful that economic data to be released later this week will prove positive. That is primarily the Nonfarm Payrolls report, which is expected to show that 200,000 jobs were added in this sector in the month of March. That would be an improvement over the previous month and may help push the needle to lower inflation.

The Federal Reserve is still holding back on announcing interest rate cuts. While rate cuts could still happen in June, they are more likely to occur in September, if they occur this year at all.

The US Jobless Claims report will also shed light on where the unemployment numbers are headed and if the economy is making a recovery. This is considered one of the most important economic indicators, as it tells how many people are unable to make purchases regularly and contribute to economic improvement with their wallets.

The US ISM Services PMI is expected this week as well, and economists anticipate no change at all from last month and the rate to stay at 52.6. Price and employment subindexes will be vital for traders looking to see if inflation is improving.