Nasdaq Index, Dow Jones, S&P 500 News: Wall Street Mixed as Traders Await Inflation Data

Market Overview

Stock futures are putting in a mixed performance at the start of the week, reflecting investor caution after the significant indices experienced setbacks last week.

The Dow Jones Industrial Average dropped 2.3% last week, its largest weekly decline since March 2023. Similarly, the S&P 500 and Nasdaq Composite fell by nearly 1% and 0.8%, respectively. However, a positive close on Friday, fueled by an unexpectedly robust jobs report, suggested resilience in the economy.

At 11:39 GMT, Dow futures are trading 39226.00, up 3.00 or +0.01%. S&P 500 Index futures are at 5252.25, down 0.75 or -0.01% and Nasdaq-100 Index futures are trading 18306.25, up 5.50 or +0.03%.

Economic Indicators

The labor market continues to show strength, with job and wage growth outpacing inflation. This trend is expected to sustain consumer spending and, by extension, economic momentum in 2024. Upcoming reports on consumer and producer price indexes are eagerly awaited by investors to gauge the effectiveness of the Federal Reserve’s anti-inflationary measures.

Bank of America analysts anticipate the upcoming CPI report to indicate easing price pressures, potentially aligning with the Fed’s monetary policy and opening the door for a rate cut in June. They predict a decrease in core goods prices but an uptick in energy costs.

Bond Yields and Oil Prices

Rising bond yields and fluctuating oil prices are key concerns for investors. The 10-year Treasury yield saw a significant increase, and U.S. crude oil prices reacted to geopolitical tensions. Brent crude futures recently fell due to easing Middle East tensions and progress towards a potential ceasefire in the Gaza conflict.

Market Forecast

Given the current economic indicators and geopolitical situation, the short-term market outlook remains cautiously optimistic. The robust job market, alongside potential moderation in inflation, suggests a resilient economy.

However, investors should be prepared for fluctuations influenced by upcoming economic reports and Federal Reserve policy adjustments. Market sentiment may lean bullish if inflation shows signs of cooling and the Fed hints at a potential rate cut, but caution is warranted given the complexities of the global economic and geopolitical environment.

Technical Analysis

E-mini S&P 500 Index futures are in a weak position shortly before the cash market opening. Crossing to the bearish side of the long-term rising wedge formation could be encouraging the selling pressure.

The nearest resistance is 5305.75. On the downside, the sellers are eyeing the 50-day moving average at 5159.97. Look for a technical bounce on the first test of this trend indicator. However, if it fails as support then look for the start of an acceleration to the downside.