Market Rebound on the Horizon: Can Key Inflation Data Spark a Weekly Turnaround in New York
- US stock futures rose on Monday, indicating Wall Street's attempt to recover some of the sharp losses experienced last week.
- Last week, the S&P 500 fell 4.3%, marking its worst week since March 2023.
- This week, investors are closely watching two major inflation reports that could influence the Fed's September policy meeting decision.
US Stock Market Seeks Recovery After Last Week’s Losses
US stock futures rose on Monday, indicating Wall Street’s attempt to recover some of the sharp losses experienced last week. Historically, September has been a challenging month for stocks, and last week was no exception.
Recovery Movement After Loss
Last week, the S&P 500 fell 4.3%, marking its worst week since March 2023. The Nasdaq Composite plunged 5.8%, its worst week since 2022, while the Dow Jones Industrial Average fell 2.9%. These declines were triggered by concerns about a slowing labor market following the August jobs report.
Inflation Data and Interest Rates
This week, investors are closely watching two major inflation reports that could influence the Fed’s September policy meeting decision. The August consumer price index (CPI) and producer price index (PPI) reports are scheduled to be released on Wednesday and Thursday morning, respectively. According to CME Group’s FedWatch tool, the market predicts a 71% chance of a 25 basis point rate cut by the Fed at its next meeting, while a 50 basis point cut is seen as less likely at 29%. Vincent Deloitte of StoneX believes that Powell is eager to cut rates but is being cautious and unlikely to risk a 50 basis point cut in September.
Trump’s Pledge to Maintain Dollar Hegemony
Former President Donald Trump recently stated that he would impose a 100% tariff on countries that turn away from the US dollar. Hao Hong of Grow Investment Group believes that this move would harm both the US and China. Trump’s pledge is seen as a strong retaliatory measure to protect the dollar’s hegemony in the global financial market.
Stock Index Futures Rise
According to CNBC data, Dow Jones futures rose 0.69%, Nasdaq futures rose 0.86%, and S&P 500 futures rose 0.73%. The US dollar index also rose 0.46% to 101.64, while the yield on the 10-year Treasury note increased 3.6 basis points to 3.750%. Additionally, WTI futures rose 0.99% to $68.33 a barrel.
Key Takeaways
- US stock futures rose on Monday, indicating a recovery attempt after last week’s losses.
- The S&P 500, Nasdaq Composite, and Dow Jones Industrial Average experienced significant declines last week.
- Inflation reports and interest rates are being closely watched by investors this week.
- Trump’s pledge to maintain dollar hegemony has sparked concerns about potential harm to the US and China.