Wall Street closed with a mixed trend this Tuesday, April 11, losing momentum late in the session as investors awaited crucial data on inflation and the first quarter corporate reporting season.
The Dow Jones closed in positive territory, driven by economically sensitive sectors, such as industrial, materials and transport. The S&P 500 index ended basically unchanged and the Nasdaq lower.
The S&P 500 gained 0.02 points, or 0.00%, to end at 4,109.14 points, while the Nasdaq Composite lost 51.92 points, or 0.43%, to 12,032.44. The Dow Jones Industrial Average rose 100.97 points, or 0.30%, to 33,686.64.
“When you see cyclicals leading the way, that indicates that recession fears might be somewhat overblown,” said Ryan Detrick, chief market strategist at Carson Group in Omaha. “That’s a healthy sign, which you wouldn’t expect to see if we were headed straight for recession.”
Stocks briefly gained momentum in the afternoon as Chicago Fed President Austan Goolsbee urged caution, warning that the Federal Reserve should be careful about raising rates too aggressively in its efforts to tame inflation.
In the absence of catalysts to move the market, investors turned to the index of Consumer Prices (CPI) on Wednesday for any evidence that the long, slow cooldown in inflation continues.
“It’s the calm before the storm” Detrick added. “With huge inflation data tomorrow, Fed minutes due out soon, and earnings just around the corner, traders are taking a wait-and-see approach on inflation data.”
In monthly terms, analysts forecast a headline and core CPI cooling to 0.2% and 0.4%, respectively. But in year-on-year terms, while median estimates call for a significant drop in headline CPI (from 6.0% to 5.2%), core CPI, excluding volatile food and energy prices, is expected to accelerates (from 5.5% to 5.6%).
As inflation slowly cools to the Fed’s 2% annual median target, market participants are betting on a 70% chance of another 25 basis point interest rate hike at the end of their policy meeting. May Currency, according to CME’s FedWatch tool.
Beyond the CPI, investors are awaiting the first quarter reporting season, which kicks off this Friday with results from three major banks, Citigroup Inc, JPMorgan Chase & Co, and Wells Fargo & Co.
Cryptocurrency-related stocks such as Coinbase Global Inc, Riot Platforms Inc and Marathon Digital Holdings Inc rose as Bitcoin broke above the $30,000 level for the first time in 10 months.
Source: Ambito
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