S&P500
The US market fell on rising inflation.
The major US indices fell for the second day in a row: the Dow Jones, the NASDAQ, and the S&P500 declined by 0.3% on Tuesday.
The S&P500 is trading at 4,397. It remains in the range of 4,360 - 4,430.
The US inflation report was released on Tuesday. US inflation accelerated again in March. It rose to 8.5% year-on-year. Moreover, inflation increased by 1.2% in a month. Fuel prices hit record highs.
Notably, core inflation (excluding fuel and food prices) fell to 0.3% in March from 0.5% in the previous months.
Soaring inflation hitting a 40-year high is the key reason why the Fed has to tighten its monetary policy. Economists expect the Fed to raise the interest rate by 0.5% as soon as May and reduce its balance sheet by $95 billion per month.
The airline industry is recovering from the COVID-19 pandemic. Boeing's orders soared 1.4 times in March.
Global trade is also rising. China's foreign trade turnover increased by 13% in March.
Energy. Oil prices are soaring again despite the US market decline. Brent crude oil is trading at $105 on Wednesday. The US Department of Energy predicts that US fuel prices will continue to rise in summer to their highest levels since 2014.
The US Department of Energy forecasts that LNG sales in the US will grow by 25% in 2022.
Inflation is further rising in the US and EU. The annual inflation rate in the UK reached a record 7%.
The USDX is trading at 100.20 and is expected to be in the range of 99.90 - 100.50. The dollar index broke through the level of 100 yesterday amid rising US inflation and expectations of a Fed rate hike.
The USD/CAD pair is trading at 1.2617, the range is 1.2580 - 1.2700. Currently, the pair is more affected by the dollar's rise than by the surge of oil prices. However, its growth is gradually slowing down.
Conclusion. The current situation in the US market is stable. There are no reasons for unprecedented growth and record sales.
Russia-Ukraine conflict. Fierce battles are taking place in the eastern part of Ukraine. According to experts, Russia continues to draw up its forces and reserves to launch a new attack. Yesterday, Russian President Vladimir Putin made some statements about hostilities in Ukraine. Putin said that the goals of the military operation in Ukraine would definitely be achieved. Currently, the occupation of Donetsk and Luhansk regions and the seizure of Mariupol, which has been defended for 48 days, are most likely considered the goals of this military operation. Putin made it clear that the Russia-Ukraine conflict could be resolved promptly if Ukraine agreed on all Moscow's terms. Therefore, violent clashes between Russian and Ukrainian troops are expected in the next 10-15 days before the start of May.
