2/28/2024

Stocks on pause ahead of inflation data release

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ХОЧЕШЬ УЗНАТЬ КАК ЗАРАБАТЫВАТЬ НА НОВОСТЯХ?

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Key points:

  • American stock indices closed trading on February 28 with virtually no changes.
  • The key event of the week will be the PCE index for January (an inflation indicator for the Fed).
  • If PCE shows growth, the Fed may keep rates at current levels longer than the market expects.

American stock indices ended trading virtually unchanged, ahead of the publication of data on inflation and other economic indicators that could clarify the prospects for lowering the Fed interest rate.

As earnings season draws to a close, investors’ focus is shifting to macroeconomic data and likely changes in the trajectory of US rates. The market has been rising in recent weeks, thanks in large part to enthusiasm around artificial intelligence stocks. The rise in prices brought the S&P 500 and Dow Jones indices to record values, and the Nasdaq approached a new high.

Over the past session, the Dow Jones Industrial Average fell 96.82 points, or 0.25%, to 38,972.41. The S&P 500 added 8.65 points, or 0.17%, to 5,078.18. The Nasdaq Composite rose 59.05 points, or 0.37%, to 16,035.30.

The decisive influence of macro data

In the absence of a new jobs report, which won’t be released until next week, the key event of the week will be the January PCE price index, which will be released on Thursday. PCE is the Fed’s main inflation indicator.

If PCE, like recent CPI and PPI inflation data, shows an increase, it could force the Fed to keep rates at current levels longer than the market expects.

Fed Chair Michelle Bowman reiterated that cautious stance on Tuesday, saying the Fed is in no rush to cut rates given the risks of rising inflation.

Other economic indicators published on Tuesday were also not very optimistic:

  • US consumer confidence fell in February after three months of growth.
  • Durable goods orders in the U.S. fell more than expected in January.

These data may increase expectations that the Fed will be more cautious on rate changes than previously thought.

Apple shares compensated for the decline

Apple shares reversed previous declines to close 0.81% higher. This came after it was reported that the company had stopped working on its electric car and transferred some of its employees to a project related to artificial intelligence.

Meanwhile, UnitedHealth shares closed down 2.27%. This became the biggest headwind for the Dow Jones index. The reason for the decline was the start of an antitrust investigation against the company by the US Department of Justice.

The S&P 500 posted 46 new 52-week highs, while the Nasdaq recorded 253 new highs and 66 new lows.

Trading volume on US exchanges was 11.21 billion shares, below the average of 11.71 billion over the last 20 trading days.

ХОЧЕШЬ УЗНАТЬ КАК ЗАРАБАТЫВАТЬ НА НОВОСТЯХ?

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