Investors' frustration at the fact that the first rate cut by the US central bank is a long way off once again punished the Spanish IBEX 35 stock index on Monday, which lost the psychological level of 10,900 points.

On Friday, the prospects of the Federal Reserve (Fed) lowering the cost of borrowing in June suffered a major blow with the publication of the U.S. labor report for March. The number of jobs created clearly exceeded analysts' forecasts and wage indicators still show elevated increases, both factors that could make the Fed approach its next steps with caution.

According to interest rate futures on LSEG's IRPR tool, the odds of a rate cut in June stand at 51%, down from levels above 60% before the jobs data release.

This outlook could be altered again on Wednesday with the March U.S. consumer price index (CPI). According to a Reuters poll, the core CPI -- which excludes unprocessed food and energy -- could come in at 3.7% year-on-year, down from 3.8% the previous month, up 0.3% month-on-month (0.4% in February). In the case of the general CPI, the increases would be 3.4% year-on-year and 0.3% monthly, compared to 3.2% and 0.4%, respectively, in February.

"(The inflation data) will give us more clues about the pace of Fed rate cuts, which could continue to stress IRRs (bond yields) and penalize equities, especially those with high duration ('growth')," said the Renta 4 brokerage house.

These analysts point out that at the end of the week, the first quarter results season will begin in the United States, with the publication of entities such as Blackrock, JP Morgan, Wells Fargo and Citigroup.

"The focus (...) will be mainly on guidance (company forecasts), insofar as the market consensus has revised down its 1Q24 EPS (earnings per share) estimates by less than its 5-year average, but nevertheless the number and percentage of S&P companies that have lowered their guidance are above their historical average," they said.

After falling 1.6% on Friday and losing the 11,000-point support level, at 07:15 GMT on Monday the Spanish selective IBEX 35 stock market index was down 34.10 points, or 0.31%, to 10,881.90 points, while the FTSE Eurofirst 300 index of large European stocks was up 0.08%.

In the banking sector, Santander rose 0.31%, BBVA fell 3.04%, Caixabank advanced 0.06%, Sabadell gained 0.03%, Bankinter gained 0.77%, and Unicaja Banco rose 0.26%.

Among the large non-financial stocks, Telefónica gained 0.08%, Inditex gave up 0.31%, Iberdrola gained 0.04%, Cellnex gained 0.77%, and the oil company Repsol lost 0.40%.

(Information by Tomás Cobos; edited in Spanish by Javi West Larrañaga)