The Dow Jones Industrial Average (DJIA) experienced a volatile day on Monday, starting with early highs before dropping back down, ultimately closing the day 40 points lower than Friday’s closing prices. This marked the beginning of a new trading week following the Non-Farm Payrolls (NFP) report released on Friday.
Federal Reserve (Fed) Chairman Jerome Powell is scheduled to present the first part of his Monetary Policy Report to the US Congress on Tuesday, with key US inflation data expected later in the week. Investors are eagerly awaiting the inflation figures, as they could provide insight into potential rate cuts by the Fed in the future.
The upcoming inflation data will be crucial, with expectations that the US Consumer Price Index (CPI) will remain steady at 3.4% year-over-year (YoY) and the Producer Price Index (PPI) is set to increase to 2.5% YoY. These figures will be closely monitored by investors looking for signs of inflation easing back to the Fed’s 2% target.
Despite hopes for a rate cut, Fed officials are cautious and waiting for more evidence of inflation trends before making any decisions. Currently, rate traders are pricing in nearly 80% odds of a quarter-point rate cut by September 18.
In terms of individual stocks, Nike Inc. (NKE) saw a decline of 3.16% on Monday, reaching a fresh 52-week low due to growth concerns and increased competition in the market. On the other hand, Intel Corp. (INTC) experienced a surge of over 6% following positive analyst notes about its potential in the AI space.
Looking at the technical outlook for the Dow Jones, the index reached a seven-week high before dropping back down, hovering just above the 50-day Exponential Moving Average (EMA). While bullish momentum remains limited, investors are hopeful for a breakthrough to reach all-time highs above the 40,000 mark.
In conclusion, the week ahead will be crucial for the stock market as investors await key inflation data and updates from the Federal Reserve. The outcome of these events could potentially impact future market trends and investment decisions.