Stock futures on the Nasdaq CompositeCOMP -0.95 percent, the S&P 500, and the Dow Jones Industrial AverageDJIA -0.62 percent have all increased by 0.1 percent.
Consumer prices are expected to have risen 8.8% year-over-year in June, slightly higher than the 8.6% increase recorded in May, according to economists. According to Michael Hewson, Chief Market Analyst of CMC Markets, “It’s been a mixed open for US markets, with the Nasdaq 100, Dow and S&P500 all treading water ahead of tomorrow’s CPI report, and the start of earnings season on Thursday, with JPMorgan Chase Q2 numbers.”
Even more critical than whether inflation has peaked are the specifics of the report that investors will be looking for. If this is the case, the Federal Reserve is more likely to slow the pace of interest rate increases. Three times as much as the markets currently anticipate the Fed to increase the benchmark lending rate at its July meeting, a quarter-point increase is anticipated.
If the CPI reading is lower than expected, the stock market may increase; however, a too high number may result in another selloff. The S&P 500 index has already lost about 20% of its value since its peak.
Fortunately, there’s cause to be hopeful for certain people. Despite a 20 percent drop in the price of oil in the past month, overall inflation may not be reduced. Over the last month, oil prices have fallen, which traders believe indicates that prices abroad have also fallen.
I don’t know. Inflation may be so depressing to the market that it will drive prices higher no matter what the reading is.
After Politico reported that the Food and Drug Administration is ready to approve the company’s two-dose COVID-19 vaccine for adults as soon as today, Novavax NVAX +3.89 percent (ticker: NVAX) rose 2% in U.S. premarket trade.
GOOGL –1.43 percent (GOOGL) was down less than 1 percent in the premarket trading session. Staff members were sent a note on Tuesday. CEO Sundar Pichai said that the company would reduce recruiting for the remainder of 2018.