Stocks flat, dollar eases as U.S. inflation data in focus

by Jonathan Adams

Investors have been focused on inflation as they weigh how soon the U.S. central bank is likely to trim rates

Global stock indexes were flat on Monday while the U.S. dollar index dropped as investors focused on this week’s U.S. inflation data that is expected to be key for the outlook for U.S interest rates.

While the U.S. consumer prices report will likely take centre stage, U.S. producer price data is also due this week, along with final reports on European inflation that should reinforce expectations for a June rate cut from the ECB.

Chinese retail sales and other data are also expected.

This week brings comments from a host of Fed speakers, including chair Jerome Powell.

Investors have been focused on inflation as they weigh how soon the U.S. central bank is likely to trim rates. Markets are pricing in nearly an 80% probability of a rate reduction by the Fed’s September meeting, with around 44 bps of cuts in total expected in 2024, according to LSEG data.

Paul Nolte, senior wealth adviser and market strategist for Murphy & Sylvest in Elmhurst, Illinois, said both CPI and PPI reports will be important to investors, but added that “there’s been so much discussion about the consumer. Is the consumer tapped out? And can the consumer still afford to spend? CPI is going to encapsulate a lot of that.”

The first-quarter U.S. earnings season is winding down, but investors will see reports this week from some big U.S. retailers including Walmart and Home Depot.

“Earnings from Walmart and Home Depot will be interesting to get a gauge on how the consumer is doing” as well, Nolte said.

The DJIA dropped 81.33 points, or 0.21%, to 39,431.51, the S&P 500 shed 1.26 points, or 0.02%, to 5,221.42 and the Nasdaq Composite added 47.37 points, or 0.29%, to 16,388.24.

MSCI’s gauge of stocks across the globe added 0.77 points, or 0.10%, to 782.83. The STOXX 600 index gained 0.02%.

Disclaimer: The opinions expressed by our writers are their own and do not represent the views of Trading and Investment News. The information provided on Trading and Investment News is intended for informational purposes only. Trading and Investment News is not liable for any financial losses incurred. Conduct your own research by contacting financial experts before making any investment decisions.

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