The major U.S. stock indices are currently indicating a potential drop at the start of trading this Monday. This follows the significant downturn seen in Friday's trading session.
Investors' anxiety about the unclear future of interest rates may depress the markets. This feeling of apprehension will likely be prevalent as key inflation data is expected to be released in the coming days.
On Tuesday, the Labor Department is expected to announce its report on consumer price inflation for February. Economists project a 0.4 percent increase in consumer prices for February, following a 0.3 percent rise in January.
Core consumer prices, which exclude the volatile sectors of food and energy, are predicted to go up by 0.3 percent in February. This follows a 0.4 percent increase in January.
The annual rate of consumer price growth is anticipated to stay consistent with the previous month at 3.1 percent. Concurrently, annual core consumer price growth is expected to slow down to 3.7 percent from 3.9 percent.
The data on consumer price inflation could greatly influence the future prospects of interest rates. Federal Reserve officials have expressed a need for "greater confidence" in the slowing of inflation before they consider a reduction in rates.
Despite anticipation for the Federal Reserve to hold rates steady at its monetary policy meeting next week, the upcoming data could alter expectations about when the central bank might finally lower rates.
Producer price inflation for February will be reported by the Labor Department this Thursday. There is an expectation for a consistent rise of 0.3 percent in February, equal to the increase observed in January.
The annual rate of producer price growth could potentially speed up to 1.2 percent from 0.9 percent. Other forthcoming data of interest to investors include retail sales, industrial production, and consumer sentiment figures.
Stocks largely rose in early trading on Friday, but saw a significant downturn as the day proceeded. The major indices failed to recover later in the session, ending the day decidedly in the red.
All major averages declined for the week, with the tech-focused Nasdaq, the Dow, and the S&P 500 falling by 1.2 percent, 0.9 percent, and 0.3 percent respectively.
Earlier strength in the stock market was partly due to the Labor Department's monthly jobs report, which showed stronger than expected job growth in February.
However, downward revisions to job growth in December and January, combined with an unexpected increase in unemployment and a slowdown in wage growth, introduced optimism that the Federal Reserve might start lowering interest rates in June.
Nonetheless, trades remained cautious ahead of next week's key inflation data release, which could significantly influence future interest rate decisions.
The Nasdaq and S&P 500 were pressured after reaching new record intraday highs, reflecting investors taking profits. This profit-taking resulted in a significant decline in technology company Nvidia’s stock, and a 4.0 percent drop in the Philadelphia Semiconductor Index. Retail stocks also showed noticeable weakness while commercial real estate stocks held firm.Crude oil futures are currently declining by $0.31 to $77.70 a barrel, following a decrease by $0.92 to $78.01 a barrel on the previous Friday. Concurrently, gold futures are incrementally escalating by $0.50 to $2,186 an ounce, having previously surged by $20.30 to $2,185.50 an ounce.
In the currency sphere, the U.S. dollar is currently being traded at 146.83 yen, falling from the 147.06 yen it was worth at the end of trading in New York on Friday. In comparison to the euro, the dollar is being traded at $1.0934, down from the previous Friday's rate of $1.0939.
Asian stocks witnessed mixed responses on Monday owing to the U.S. jobs report demonstrating mixed indicators about the condition of the world's leading economy. Although the stronger yen acted upon Japanese stocks detrimentally, positive inflation information facilitated buying in mainland China and Hong Kong.
A weakened dollar led to the further elevation of gold prices, hitting another record high, whereas concerns about Chinese demand led to an extension of the previous week's losses in the oil sector.
China's Shanghai Composite Index rose by 0.7 percent to reach 3,068.46, as data released over the weekend indicated an increase in the country's consumer prices for the first time since August. This rise surpassed economists' predictions, thereby alleviating concerns about deflation in the world's second-largest economy. Conversely, the producer price index fell by 2.7 percent from the previous year, greater than the previous month's drop of 2.5 percent.
Japan's markets dropped due to selling in semiconductor stocks, and a stronger yen also negatively affected stocks following revised data indicating the country had successfully averted a technical recession. This has paved the way for the Bank of Japan to increase interest rates in the upcoming policy meeting next week.
There was a notable decrease in Seoul's stocks following a series of considerable gains recently. The Kospi index dropped by 0.8 percent to end at 2,659.84. Australian markets also saw significant drops, particularly in mining, banking, and energy stocks.
European stocks have shown a decline amid much uncertainty around the future of interest rates. Following positive U.S. payroll figures for February, investors are eagerly awaiting the release of key U.S. consumer and producer price data this week for further direction. The German DAX Index, the U.K.'s FTSE 100 Index, and the French CAC 40 Index have all shown drops.
Further, tech stocks have shown sizeable losses. British electronics retailer Currys saw a significant decrease in shares after a takeover bid for the company was not forthcoming from Elliott Investment Management. Tobacco giant Imperial Brands saw a surge in shares after announcing a £1.1 billion share repurchase program.
Finally, the Treasury Department is set to announce the results of this month's auction of $56 billion worth of three-year notes.
