Nasdaq 100, Dow Jones, S&P 500 News: Wall Street Wavers Amid Inflation Uncertainty

U.S. Stock Market: Early Volatility Amid Mixed Signals

The U.S. stock market is exhibiting a blend of strength and weakness in early trading this Monday, following a robust performance in the first quarter. Traders are assessing the impact of recent U.S. inflation data and anticipating the upcoming Non-Farm Payrolls report this Friday. The clash between momentum traders and value-oriented investors is contributing to noticeable market volatility.

At 14:45 GMT, the blue chip Dow Jones is trading 39579.53, down 227.84 or -0.57%. The benchmark S&P 500 Index is at 5243.81, up 10.54 or +0.20% and the tech-weighted Nasdaq Composite is trading 16397.65, up 18.19 or +0.11%.

Economic Insights

ISM Manufacturing Index Surges

The U.S. manufacturing sector, according to the ISM Manufacturing Index, has expanded for the first time in 17 months. The March reading climbed to 50.3, surpassing both the previous month’s figure and market expectations. This growth is underpinned by significant gains in production and prices, although employment remains a concern, still in contraction territory.

Fed Chair Powell on Rate Cuts

Federal Reserve Chair Jerome Powell, in a recent interview, indicated a cautious approach towards rate cuts, citing current economic data. Despite the PCE inflation rate slightly exceeding the Fed’s 2% target, Powell’s comments suggest a balanced approach to monetary policy in the near term.

Stock Highlights

Notable Movers

• Micron Technology shares are up, buoyed by Bank of America’s optimistic outlook on high-bandwidth memory demand.
• 3M is witnessing a rise following its healthcare spinoff and a landmark settlement.
• Gold-related stocks, including Barrick Gold and Royal Gold, are benefiting from a surge in gold prices amid rate cut speculations.

Mixed Performance

• Trucking stocks like J.B. Hunt Transport face downgrades due to market challenges.
• Devon Energy is gaining on Wells Fargo’s positive outlook, while AT&T is under pressure following a significant data breach.
• Tesla and UPS are making modest movements, reflecting specific company developments.

Short-Term Market Forecast

Given the mixed economic indicators and company-specific news, the market appears cautiously optimistic. The upcoming Non-Farm Payrolls report will be critical in shaping short-term sentiment. Traders should expect continued volatility, with a slight bullish bias as manufacturing growth and potential Fed caution on rate hikes may support market optimism.

Technical Analysis

The benchmark E-mini S&P 500 Index is attempting to trend higher for a third staight session Monday in addition to hitting another record high. The strong upside momentum has put the upper end of a rising wedge at 5365.75 on the radar.

On the downside, the key support is a short-term bottom at 5263.00, followed by  the lower end of  rising wedge at 5257.50.

After an early rise, a lower close will signal the presence of sellers. This could trigger the start of a near-term pullback.