Futures on US stock indices are trading slightly higher compared to Friday's closing levels. S&P 500 futures have edged up by 0.1%, while the tech-heavy NASDAQ has gained 0.2%. Futures for US and European stocks are also showing positive momentum.
The absence of statistics helps maintain market equilibrium, but important fundamental data lies ahead, which could impact the plans of the Fed. Treasury bond yields and the US dollar remain largely unchanged as well.
Despite the growth observed since the start of this week, the stock market is enduring its toughest month yet, as policymakers remain determined to curb inflation through interest rate hikes. Economic reports have now gained considerable significance, as highlighted during Federal Reserve Chair Jerome Powell's speech in Jackson Hole. The fact that the regulator is prepared to continue raising rates is curbing demand for risk assets.
August has proven to be a challenging month for traders. However, things could have been much worse if the technological sector had also collapsed, which heavily relied on NVIDIA's report.
This week, the main focus will be on key economic data from the US, with many anticipating that incoming statistics will indicate a softer landing, as predicted by the Fed. Should this happen, demand for risk assets will undoubtedly rise.
Today, traders will be keeping an eye on US consumer confidence data. Other reports this week include employment data, the core PCE deflator (a key inflation indicator for the Fed), and August wage data. Eurozone inflation indicators will also be in the spotlight this week.
Chinese authorities signaled further measures to support their economy today, leading to a market upswing. It was revealed that China was ready to lower mortgage interest rates by trillions of yuan for the first time since the global financial crisis. The Asian stock index rose by 0.8%, driven by gains in the region's major indices. The Hang Seng Index continued its upward trajectory for the second day, adding 2%.
As for commodities, oil prices rose to $81 per barrel as traders brace for the latest inventory data. Gold remained relatively unchanged.
As for the S&P 500, pressure on the index has eased slightly, but the upside potential is limited. Bulls need to take control of $4,427. From this level, they may push the price higher to $4,447. In addition, bulls should fix the price above $4,469, which may cancel the bearish market. In the event of downward movement due to waning risk appetite, bulls will have to protect $4,405. Breaking through this level, the trading instrument may return to $4,382 and $4,357.
