Recent weeks have seen significant stock market fluctuations due to the United States Federal Reserve’s decision to raise interest rates to combat inflation. Despite impending inflation reports due later this week, investors are buoyed by a strong performance in stock indexes in the past week.
This upbeat investor sentiment has translated into a morning of gains for index values. The Dow Jones saw an increase of 128 points, marking a rise of 0.4%, while both the S&P 500 and Nasdaq registered gains of 0.6% each. It remains uncertain whether these gains will be sustained post the release of the upcoming inflation reports. Federal Reserve Chairman Jerome Powell’s commitment to curbing inflation suggests further rate hikes on the horizon. Investors are currently anticipating more moderate hikes that would have a lesser impact on their investments.
“We observe a sense of relief in equity prices and a recent correction in the broad Dollar trend as markets focus on central bank hawkishness in the short term. Investor positioning appears to be relatively cautious,” noted Citigroup strategist Ebrahim Rahbari.
US markets open:
Dow Jones Industrial $DJI opens at 32159.49 rising 7.78 pts at 0.02%S&P 500 $SPX opens at 4083.67 rising 16.31 pts at 0.40%
Nasdaq $IXIC opens at 12174.94 rising 62.63 pts at 0.52% pic.twitter.com/car5W2WWde
— FinGeek (@TheFinGeek) September 12, 2022
The consumer price index report for August is scheduled for release tomorrow, with reports on retail sales and industrial production to follow on Thursday. These data points are critical for the Fed’s assessment and could prompt significant stock market movements upon their release.
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