Vladimir Zernov
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U.S. Stock Market

Inflation Reports Provide Support To Stocks

U.S. has just released Inflation Rate and Core Inflation Rate reports for August.  Inflation Rate increased by 0.3% month-over-month in August compared to analyst consensus which called for growth of 0.4%. On a year-over-year basis, Inflation Rate increased by 5.3%, in line with analyst estimates. Core Inflation Rate grew by 4% year-over-year compared to analyst consensus of 4.2%.

S&P 500 futures are gaining ground after the release of inflation reports as they indicated that inflation remained under control. Fed Chair Jerome Powell has previously stated that higher inflation was a temporary phenomenon, and these reports confirm his stance, which is bullish for stocks.

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Precious Metals Move Higher As Dollar Retreats

U.S. dollar found itself under pressure after the release of inflation reports as traders bet that Fed would not rush to reduce its asset purchase program.

Weaker dollar provided support to gold and silver which were under pressure ahead of the release of inflation reports. Gold moved closer to the $1800 level which may provide some support to gold mining stocks at the beginning of today’s trading session.

It should be noted that gold will likely face strong resistance at $1800 as Treasury yields are moving higher, which is bearish for precious metals that pay no interest.

WTI Oil Attempts To Settle Above $71

WTI oil continues to move higher as traders expect more production cuts due to Hurricane Nicholas, which has already weakened into a tropical storm.

Oil has recently managed to get above the psychologically important $70 level, and its bullish move is supported by hurricane-related production cuts and technical factors.

In case WTI oil manages to settle above the $71 level, it will continue its upside move and head towards the material resistance level which is located at $72.50. In this scenario, oil-related stocks should get more support.

For a look at all of today’s economic events, check out our economic calendar.

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