Nasdaq Index, Dow Jones, S&P 500 News: Early Slide Ahead of Upcoming Inflation Data Release

Market Movements Ahead of Inflation Data

U.S. stock futures are signaling a lower cash market opening on Monday, with Dow Jones Industrial Average futures falling 0.2%, and S&P 500 and Nasdaq-100 futures each dropping 0.1%. This follows a week of losses for major indexes such as the Dow, S&P 500, and Nasdaq Composite, which declined by 0.9%, 0.3%, and 1.2% respectively.

Focus on Nvidia

Nvidia has captured market attention after insiders sold shares during the company’s significant stock rally. Despite a 5.6% decrease on Friday, Nvidia’s shares are up 77% year-to-date. The future performance of Nvidia’s stock is a subject of active discussion among market watchers.

Anticipation for Inflation Reports

The upcoming Consumer Price Index (CPI) and Producer Price Index (PPI) for February are in the spotlight, with previous months’ data showing higher-than-expected inflation. This has raised concerns about persistent inflation and its possible effects on Federal Reserve rate decisions.

Jobs Data and Economic Indicators

The addition of 275,000 jobs in February exceeded expectations, but the unemployment rate unexpectedly rose to 3.9%. This mixed data adds to the uncertainty regarding the Federal Reserve’s interest rate decision-making process.

Federal Reserve and Rate Cut Outlook

Federal Reserve Chairman Jerome Powell has suggested that rate cuts may be on the horizon, conditional on further signs of economic slowdown and inflation moving towards the 2% target. The market anticipates that rate cuts may not be implemented until mid-2024, depending on the stability of core services inflation.

Short-Term Forecast

In the short term, the U.S. stock market appears poised for a cautious trade, influenced by uncertainties around inflation and interest rate policies. The recent developments in Nvidia’s stock, marked by insider selling and a significant drop in price, add to this conservative outlook. Investors are advised to monitor the upcoming CPI and PPI reports closely, as they will be crucial in determining the market’s direction and will impact key stocks like Nvidia.

Technical Analysis

The main trend is up according to the daily swing chart. A trade through 5257.25 will signal a resumption of the uptrend. A move through 5126.00 will change the short-term trend to down. This could trigger an acceleration to the downside with the 50-day moving average at 5016.71 the next major target.

On Friday, the index also posted a potentially bearish closing price reversal top. This chart pattern was confirmed earlier today. This chart pattern typically leads to a minimum 2 to 3 day correction. It doesn’t mean the trend has changed, but it does signal that the selling is greater than the buying at current price levels.