U.S. stock futures showed gains due to positive inflation data and prospects of a Fed rate cut in 2024.
November marks substantial monthly gains for major indexes, with the Dow and S&P 500 near year-to-date highs.
Oil prices react to OPEC’s upcoming decision on 2024 production targets, influencing market sentiment.
US Stock Futures Up on Inflation Data and Fed Rate Cut Hopes
U.S. stock futures saw an uptick on Thursday shortly before the cash market opening, spurred by optimistic inflation data and the prospect of the Federal Reserve cutting rates next year. Futures tied to the Dow Jones Industrial Average climbed nearly 0.7%, while those for the S&P 500 and Nasdaq-100 rose 0.5% and 0.4%, respectively.
November Marks Strong Monthly Gains for Major Indexes
Wall Street is poised to conclude November with significant monthly gains. The Dow and the S&P 500 are close to their year-to-date highs, with the Dow up 7.2% and the S&P 500 increasing by 8.5% for the month. The Nasdaq Composite, despite a slight dip during the day, remains just 0.7% away from its 2023 closing high.
Inflation Data Influences Market Sentiment
New European data indicating easing inflationary pressures boosted market sentiment. In the U.S., the personal consumption expenditures (PCE) price index rose as expected in October, gaining 0.2% monthly and 3.5% annually. This data, aligning with forecasts, suggests the Fed might maintain current rates before reducing them in 2024.
U.S. Treasury Yields and Interest Rate Outlook
U.S. Treasury yields remained steady as investors analyzed the key inflation data. The 10-year yield increased slightly to 4.301%, while the 2-year yield rose to 4.668%. These movements reflect growing hopes among investors for an end to the Fed’s rate-hiking cycle.
Oil Prices React to OPEC’s Production Decision
In commodity news, oil prices rose on Thursday morning ahead of OPEC’s decision on 2024 production targets. The West Texas Intermediate and Brent crude contracts saw increases in anticipation of a potential 1 million barrel per day production cut. This decision is crucial for the oil market as it sets the tone for 2024’s supply outlook.
In the short term, U.S. stock markets are expected to maintain their upward momentum, buoyed by positive inflation data and expectations of a Federal Reserve rate cut in 2024.
Oil prices and energy companies may experience volatility as markets await crucial decisions from OPEC regarding production cuts for the next year.
The stability in Treasury yields suggests a cautious but optimistic investor sentiment, focused on the Federal Reserve’s upcoming interest rate decisions.
Daily E-mini S&P 500 Index
The current daily price of the E-mini S&P 500 Index stands at 4567.25, slightly higher than the previous daily close at 4559.25. When analyzing the relationship with the moving averages, the 50-day moving average, at 4377.76, shows that the index is above this short-term indicator. Similarly, the index surpasses the 200-day moving average of 4306.91, indicating strength in the long-term trend.
Overall, the E-mini S&P 500 Index exhibits bullish sentiment, supported by its position relative to both the 50-day and 200-day moving averages.
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.