By Caroline Valetkevitch

NEW YORK (Reuters) – Stock indexes edged lower on Monday, as U.S. Treasury 10-year yields touched 14-month highs as a strong U.S. economy and persistent inflation prompting investors to assess the possibility that the Federal Reserve may halt its easing cycle.

It hit its highest level in more than two years. The Nasdaq fell, while the benchmark rose to a two-month low to finish with small gains.

Investors are anxiously awaiting the reading of the US Consumer Price Index on Wednesday. Any upside surprises will feed fears that the Fed may stop its rate cuts. A Reuters poll of economists gave a median forecast for an annual increase of 2.9%, up from November’s 2.7%, and for a monthly increase of 0.3%.

US producer price data is due on Tuesday.

On Friday, the December jobs report showed that 256,000 workers were added to US nonfarm payrolls, the largest increase since March and above expectations for an increase of 160,000.

Investors are also worried about whether inflation may rise due to the tariff, immigration and tax policies of the incoming administration of US President-elect Donald Trump.

Markets are pricing in about 27 basis points of cuts from the Fed this year, with a 52.9% chance for a cut in June.

“It’s touch and go for the next few days until we get inflation news,” said Peter Cardillo, chief market economist at Spartan Capital Securities in New York.

“The Fed has become more hawkish this time,” and investors are considering the possibility that the U.S. may have seen the end of rate cuts for now, Cardillo added.

The Fed’s next policy meeting is scheduled for January 28-29.

The benchmark 10-year note yield hit a 14-month high of 4.805% and was last up 1.6 basis points at 4.79%.

On Wall Street, the increase of 358.67 points, or 0.86%, to 42,297.12, the S&P 500 rose 9.18 points, or 0.16%, to 5,836.22 and fell 73.53 points, or 0.38%, to 19,088.

MSCI’s gauge of global stocks also fell 2.07 points, or 0.25%, to 831.79. The index fell by 0.55%.

The fourth quarter US earnings reporting period also began this week with results expected from some of the largest US banks including JPMorgan Chase (NYSE: ).

“The question facing investors is which is more important – strong corporate profits, which come from a strong economy, or low inflation, which comes from a weak economy,” he said. Oliver Pursche, senior vice president, advisor at Wealthspire Advisors in Westport, Connecticut.

“Most investors prefer a stable economy with a slight increase in inflation,” he said.

Helping the Dow and S&P 500 is a 3.9% gain in UnitedHealth Group (NYSE: ) shares, President Joe Biden’s administration proposed a 2026 reimbursement rate for Medicare Advantage plans run by private insurers, resulting in a 2.2% increase in fees.

The , which measures the greenback against a basket of currencies, rose 0.26% to 109.94. Earlier in the session it rose to its highest level in more than two years, reaching 110.17 and extending its recent rally.

The euro was down 0.23% at $1.022. Against the Japanese yen, the dollar weakened by 0.03% to

157.64.

A jump in energy prices has increased investors’ worries about inflation.

Oil prices rose about 2% to a four-month high as traders expected broader US sanctions on Russian oil that would force buyers in India and China to look for other suppliers.

rose $2.25 to settle at $78.82 a barrel and rose $1.25 to settle at $81.01.

Gaining the dollar, gold fell 0.9% to $2,664.49 an ounce. Gold generally struggles to compete for investor money in a high-yield, high-dollar environment.