Key Highlights

● PepsiCo slipped with no company-specific news, days ahead of Thursday's third-quarter results.

● Analysts expect earnings of $2.30 a share on revenue of about $24.98 billion.

● Consumer staples have fallen for eight straight weeks, squeezed by rising bond yields and cautious shoppers.

PepsiCo shares slipped on Monday with no company-specific news, days ahead of the snack and drinks giant's third-quarter results on Thursday.

Waiting for the numbers

PepsiCo (NASDAQ:PEP) slipped on Monday, Oct. 5, trading lower in late morning. There was no company announcement or filing to explain the move.

PepsiCo is scheduled to report third-quarter results before the opening bell on Thursday, Oct. 8. Analysts expect earnings of $2.30 a share on revenue of about $24.98 billion. Deutsche Bank has cut its rating on PepsiCo to Hold.

Stocks often drift in the days before a big report as investors wait to see the numbers rather than take a strong position.

Staples stuck in a slump

PepsiCo's dip also fits a longer trend. Consumer staples, the sector that includes food, beverage and household-products makers, has fallen for eight straight weeks. Real estate is on a similar losing streak.

Staples companies are usually seen as steady, defensive holdings. But they face two pressures right now. Rising bond yields make their dividends look less attractive by comparison, and cautious shoppers can trade down to cheaper brands. On Monday, the 10-year Treasury yield climbed to its highest close since 2002.

Consumer-facing stocks more broadly had a tough day. Chipotle (NYSE:CMG) sank without fresh news, McDonald's (NYSE:MCD) touched 52-week lows before bouncing, and Nike (NYSE:NKE) fell after S&P Global Ratings cut its credit rating.

Tech carries the market higher

The big indexes still rose. The S&P 500 added 51.23 points to 7,773.95, just shy of its summer record. The Nasdaq Composite climbed 286.45 points to a record close of 27,477.31, and the Dow Jones Industrial Average gained 90.94 points to 51,267.90. Large technology and artificial-intelligence stocks, led by a record-setting Nvidia (NASDAQ:NVDA), did most of the lifting.

"With the economic data calendar being light and earnings about a week away, investors are really groping for anything positive to glom onto, and clearly they're looking at lower energy prices," said Art Hogan, chief market strategist at B. Riley Wealth.

Lower energy prices were a theme. Brent crude settled at $100.32 a barrel, down on the day, after G7 nations agreed to release 100 million barrels from emergency reserves. Fuel and transport costs matter for a company that ships drinks and snacks across the globe.

Inflation signals stay hot

The economic data offered mixed signals for consumer companies. Friday's jobs report showed only 29,000 jobs added in September, which cut bets on an October Federal Reserve rate hike. But on Monday, the ISM services survey showed prices paid by service businesses rising to their highest level since July 2022.

ISM survey chair Steve Miller said "fuel costs mentioned twice as often as any other single issue" among respondents. Rising input costs can squeeze margins for packaged-goods makers unless they can pass them on through higher prices.

What to watch

PepsiCo's results before the open on Thursday are the big event. Investors will look at sales volumes, pricing and any update to the company's outlook for signs of how shoppers are holding up. Before that, the Federal Reserve releases minutes from its September meeting on Wednesday, Oct. 7, at 2pm ET. Delta Air Lines reports on Friday, and big banks begin reporting on Oct. 13, kicking off the broader third-quarter earnings season.