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Vladimir Zernov
U.S. Stock Market

Traders Ignore Problems On The Stimulus Front

S&P 500 experienced a sell-off in the last few hours of yesterday’s trading session but S&P 500 futures indicate that the market is ready to come back in today’s trading.

All-time high levels are now in sight, and many traders have a fear of missing out on the additional upside.

Interestingly, the market completely ignores the lack of progress in coronavirus aid negotiations between Republicans and Democrats.

The U.S. economy needs another round of stimulus while U.S. consumer spending may take a hit in case consumers do not receive additional support.

However, market participants focus on the current upside momentum and look ready to buy stocks on every dip. In this environment, the market will need significant negative catalysts to break the current upside trend.

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Crazy Action In The Precious Metals Space

Today, gold and silver traders had a very busy trading session. Spot gold traded as low as $1862 before rebounding back above $1900. Silver tested support at $23.50 before getting back above $25.00.

The U.S. Dollar Index is mostly flat so the movements of the American currency had no material impact on precious metals’ trading dynamics.

The precious metals have been due for a pullback after a major rally, and it looks like the main trigger for the sell-off was the increase in U.S. government bond yields.

Precious metals pay no interest so they become less attractive when the yield of  alternative safe investments like U.S. government bonds increases.

At the same time, many traders who have missed the previous rally stepped in and bought gold and silver. Gold and silver mining stocks will likely experience similar action today.

Inflation Rate Beats Analyst Expectations

The U.S. has just provided Inflation Rate and Core Inflation Rate reports for July. Inflation Rate increased by 0.6% month-over-month compared to analyst consensus which called for an increase of 0.3%. On a year-over-year basis, Inflation Rate increased by 1.0%.

Core Inflation Rate grew by 1.6% year-over-year compared to analyst consensus which called for an increase of 1.1%.

Stronger-than-expected inflation numbers show that consumer activity was healthy in July.

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

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