Stock Rally Loses Steam Just Days Ahead of CPI
Stocks struggled to make headway, following a furious rally that put the market on pace for its best year since 2019, with traders awaiting key inflation data that will help shape the outlook for Federal Reserve rates.
Equities barely budged after the S&P 500 notched a series of all-time highs. Nvidia Corp. slid as China opened a probe over suspicions the US chipmaker broke anti-monopoly laws around a 2020 deal. Meantime, Chinese stocks listed in the US rallied after the country’s top leaders vowed to be “moderately loose” on monetary policies and “more proactive” on fiscal measures, a sign of further easing ahead.
Inflation data including the consumer price index on Wednesday will offer Fed policymakers a final look at the pricing environment ahead of their meeting the following week. Any indication that progress has stalled on the inflation front could well undercut the chances of a third straight reduction in rates. The jobs report on Friday showed the opposite: traders piled on more bets that Fed officials will lower rates again.
“Friday’s strong jobs report may have traders wondering whether this week’s inflation data will come in hotter than expected, but at this point it may take a dramatic increase to prevent the Fed from following through with another rate cut next week,” said Chris Larkin at E*Trade from Morgan Stanley.
The S&P 500 fell 0.1%. The Nasdaq 100 slid 0.3%. The Dow Jones Industrial Average wavered.
The yield on 10-year Treasuries advanced two basis points to 4.17%. The Bloomberg Dollar Spot Index fluctuated.
Source : Bloomberg
