US Stocks Higher Ahead of Key Earnings -Nasdaq up 0.66%
US stocks pushed higher in trading yesterday as investors looked ahead to Nvidia’s latest earnings results, with the Nasdaq leading the gains. The Nasdaq rose 0.66% to close at 26,151, while the S&P 500 added 0.32% to finish at 7,677. The Dow Jones also moved higher, gaining 0.30% to close at 53,577.
Treasury yields pulled back across the curve as markets continued to price in the prospect of increased bond buybacks from the US Treasury. The 2-year yield fell 5.8 basis points to 4.174%, while the 10-year yield dropped 6.7 basis points to 4.629%. The move lower in yields helped keep the dollar under pressure, with the USD Index edging 0.09% lower to 98.91.
Oil prices were the major mover, with Brent crude falling 5.48% to $87.12 and WTI dropping 3.12% to $82.36. Crude prices slipped to one-week lows as investors appeared to take some comfort from the prospect of US sanctions rather than a further escalation in hostilities.
Gold was relatively steady after earlier pushing to fresh multi-month highs, with the precious metal closing 0.11% higher at $4,656.59. The broader backdrop of lower Treasury yields and a softer dollar continued to provide support, although traders remain focused on whether gold can sustain its recent move higher.
US Inflation Data in Focus for Traders Today
Traders are preparing for a busy final trading session of the day today. Not only will they have to deal with the ever-present possibility of a geopolitical update hitting the news wires, but they also have the FOMC’s favoured inflation data, the Core PCE Price Index numbers, due out. The market is expecting to see a 0.2% increase in the month-on-month number, with the annual figure coming in at +3.2%, still well above the 2% target. Although recent data has come in weaker than expected and pulled back Fed rate hike expectations, a sticky print today could heighten those calls for a 25-basis point rise at the September meeting. Anything stronger than expected would see the dollar push higher, while weaker numbers could see a rate hike for September taken completely off the table and see the dollar break into fresh downside ranges.
Busier Event Calendar for Traders Today
Attention now turns to a much busier macroeconomic calendar, with Australian CPI data due during the Asian session a big focus early in the day. Market expectation is for the headline month-on-month number to jump to +0.9% after a -0.1% print last time out, while the year-on-year number drops down to a 3.3% increase, and traders are expecting plenty of volatility in the Aussie around the event. There is little on the schedule in the London session; however, there is a big US data drop early in the New York day. The Federal Reserve’s preferred inflation measure, Core PCE Price Index (exp +0.2% m/m), is due alongside preliminary US GDP (exp +1.5% q/q) and Durable Goods (exp +0.5%) data. The combination of inflation and growth data could provide fresh clues on the outlook for US interest rates and add further volatility across bonds, the dollar and equities.
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