NASDAQ 100, Dow Jones, S&P 500: Stocks Resilient Ahead of US Inflation Data

Highlights

• CPI for July expected to rise by 0.2%.
• Nasdaq rises 31% amid tech optimism.
• Biden restricts U.S. investments in China’s tech.

US Inflation Data Set to Influence Federal Reserve’s Next Move

U.S. stock index futures saw a positive momentum on Thursday as traders and investors eagerly awaited the release of the key Consumer Price Index (CPI) for July. Scheduled for 12:30 GMT, predictions lean towards a 0.2% rise, mirroring the previous month’s increase. Annually, it’s anticipated that the CPI will mark a 3.3% climb, a slight increase from the previous 3.0%.

Nasdaq’s Downtrend and Optimism in the Market

Despite the Nasdaq leading a dip in Wall Street the previous day, notably with Nvidia dropping by 4.7%, the index has shown remarkable resilience this year. It boasts a 31% growth, fueled by hopes for a stable U.S. economic landing amidst the Fed’s robust interest rate adjustments and budding enthusiasm surrounding artificial intelligence’s potential. As the tech sector responded, significant players like Amazon.com, Microsoft, and Apple saw a pre-bell uptick ranging from 0.5% to 0.9%.

Corporate Highlights and Earnings Updates

Corporate America wasn’t without its fair share of action. Walt Disney stock prices leaped by 1.5% post their Wall Street estimates beat on the quarterly adjusted profit per share. Capri Holdings Ltd., the force behind Michael Kors, saw its stocks skyrocket by 58.3% following news of an $8.5 billion acquisition by Tapestry, which conversely dipped by 3.8% after the announcement. Additionally, U.S.-listed Alibaba stocks swelled by 4.3% after revealing encouraging quarterly sales figures, indicating an uptick in consumer sentiment.

Trade Concerns Amidst Positive Market Movements

While the market showed signs of optimism, President Joe Biden’s recent executive order could introduce an air of caution. The order, signed on Wednesday, restricts certain new U.S. investments in China, particularly in sensitive tech sectors like computer chips.

Short-Term Outlook

The general market sentiment leans towards optimism, as evidenced by traders’ 86.5% odds favoring the Fed’s halt in aggressive interest rate hikes. However, the S&P is expected to maintain its position for some time until clarity around the peak U.S. rates emerges. Given the looming inflation data release and corporate dynamics at play, the market appears cautiously bullish.