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NASDAQ 100, Dow Jones, S&P 500 News: Inflation Data Spurs Early Market Rise

By:
James Hyerczyk

Amid quarter-end turbulence, today's PCE inflation data offers a silver lining, boosting Nasdaq Composite, S&P 500 and Dow.

S&P 500, Nasdaq 100, Dow Jones

Highlights

  • Stock rise on opening, buoyed by today’s inflation data.
  • Federal Reserve’s core PCE index up 0.1% in August.
  • Nike’s Q1 earnings exceed forecasts; shares jump 10% premarket.
  • Anheuser-Busch InBev’s shares surge on positive margin outlook.

Inflation Report Lifts Stock Futures amid Quarter-End Turbulence

The major U.S. stock indexes are trading higher shortly after the cash market opening, inspired partly by the latest inflation data that has offered solace at the culmination of a challenging month and quarter. This optimistic trend is further supported by Nike’s robust fiscal first-quarter earnings, which surpassed analyst projections, sending its shares soaring by 10% in premarket trading.

Market’s Positive Response to Core PCE Data

The Federal Reserve’s favored inflation metric, the personal consumption expenditures (PCE) price index, provided a significant boost. The core PCE, after adjusting for the often erratic food and energy sectors, registered a 0.1% rise in August and an annual increase of 3.9%. This slightly defied the anticipation by Dow Jones economists, who had forecasted a 0.2% monthly growth for the core PCE. Such a report will likely be received favorably by the Fed, especially as it provides a more nuanced perspective on inflationary trends.

Corporate Shares Making Headlines

Apart from Nike’s impressive stride, Anheuser-Busch InBev is also in the limelight. Its shares leaped almost 4% in premarket trading, following Bank of America’s assertion that the brewing behemoth is nearing a pivotal moment in margins. This upgrade from neutral to buy signals a robust vote of confidence in the company’s future prospects.

September’s Stock Market Overview

Despite the recent uplift, Wall Street’s September journey hasn’t been without its share of hurdles. Both the S&P 500 and the Nasdaq Composite are projected to close September with declines of 4.6% and nearly 6%, respectively. The Dow too anticipates a 3% drop this month. The rapid descent of stocks during this seasonally unstable period has rendered the markets oversold, inciting concerns about the forthcoming economic landscape.

Outlook: Bearish or Bullish?

Considering the market’s recent bearish tilt, there’s a palpable sense of caution. While some optimism remains, stemming from corporate earnings and inflation data, the broader sentiment echoes concerns about the market’s ability to maintain stability in the coming months.

Technical Analysis

Daily Dow Jones Industrial Average

The Dow Jones Industrial Average’s current daily price of 33,723.75 sits below both the 200-Day moving average (33,808.59) and the 50-Day moving average (34,734.18), suggesting a prevailing downtrend.

The 14-Day RSI at 35.21 indicates weakened momentum and is edging towards the oversold territory. However, keep in mind that overcoming the 200-Day moving average could fuel the start of a meaningful short-covering rally.

Considering these factors, the market sentiment for Dow Jones Industrial Average appears to be bearish.

About the Author

James is a Florida-based technical analyst, market researcher, educator and trader with 35+ years of experience. He is an expert in the area of patterns, price and time analysis as it applies to futures, Forex, and stocks.

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