On Thursday, the US stock market trading may receive lost optimism. At least, the fresh statistics on inflation and employment in the US may serve as a ground for recovery and growth of indices.
The data has already improved market sentiment in the US premarket trading. Analysts at InstaForex have analyzed the situation and are ready to present their fresh overview of the US trading session.
On Wednesday, Wall Street’s benchmark indices suffered losses. Despite a relatively calm macroeconomic background, the tech sector dragged the indices down. The Dow Jones Industrial Average slumped by 191 points or 0.54%, the Nasdaq index topped the list of losers with a 1.2% drop, and the S&P 500 index sagged and closed at $4,467.
The benchmark indices spent Thursday’s premarket session in the green. The release of fresh CPI data boosted index futures by 0.8-1.1%, but within minutes the gain was pared back to 0.5-0.9%. As for the forecast for the S&P 500 index, it may spend the day in the range of $4,470-$4,520.
On Wednesday, the indices closed lower as investors were cautious ahead of the CPI data, with technology and financials adding to the pressure.
The Nasdaq index led Wall Street lower on Wednesday, with heavyweight Nvidia falling by 4.7%, followed by other stocks – the megacaps and AI-related companies – that lost 0.4%-2.3%.
On Tuesday, the losses followed a broad sell-off after rating agency Moody’s downgraded several small and medium-sized banks. On Wednesday, big banks extended those losses, with Bank of America plunging by 0.8% and Wells Fargo losing 1.3%.
Four of the S&P 500’s 11 leading sectors rose, with energy stocks leading the gains, up 1.22% to a near six-month high, tracking a jump in crude prices.
On Tuesday, China’s deflation data also weighed on market sentiment, as it fueled fears of a deeper downturn in the global economy.
On Thursday, Wall Street was strongly bullish. US stock index futures were up 0.3-0.6% in the European session, and the release of fresh US inflation data only added to momentum.
The main intrigue of the week has been revealed and speaks to the stability of the disinflationary process, which is certainly in favor of the risk-takers. Monthly inflation in the US in July 2023 was unchanged at 0.2%, matching market expectations. Notably, the housing cost index accounted for 90% of the increase. Prices for car insurance, education, and recreation also rose. On the other hand, airfares showed the largest decline. On a yearly basis, US inflation accelerated to 3.2% from 3% in June, but came in below forecasts of 3.3%. The indicator has declined for 12 consecutive months. A year earlier, inflation began to decline from a peak of 9.1%.Meanwhile, core inflation, which excludes volatile food and energy prices, declined to 4.7% from 4.8% in June, below expectations of 4.8%.
The indicators point to a fairly steady downtrend in inflation. At the same time, analysts were expecting similar data for July, but economists say August may bring surprises. The preliminary forecast is that the CPI may stagnate at 3% until the end of the year.
Notably, new statistics may change the economic picture before the Fed’s September meeting, but so far the financial markets believe in the Fed’s pause by 86%. In addition, the US Department of Labor’s report showed that unemployment claims rose by 21,000 to 248,000 on Thursday. That exceeded economists’ expectations of 230,000.
Shares of megacap stocks such as Amazon, Microsoft, Apple, and others rose by 0.5% to 1.3% on the data.
On the earnings side, Walt Disney jumped by 1.5% after beating Wall Street forecasts for quarterly earnings per share.
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00:00 INTRO
00:49 S&P500
01:43 QUOTES
03:28 CONSUMER PRICE INDEX (CPI) (M/M) (JULY)
03:56 CONSUMER PRICE INDEX (CPI) (Y/Y) (JULY)
04:16 CORE CPI (Y/Y) (JULY)
05:02 UNEMPLOYMENT CLAIMS
06:22 USDX
07:53 USD | CAD
08:20 OIL
09:02 BTC | USD
09:25 CRYPTO
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