Market Relief Drives Up Stock Indexes

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Investors are waiting for the latest inflation reports.

Stocks have fluctuated wildly in the last few weeks as the United States Federal Reserve hikes interest rates to reduce rising inflation. Later this week, the latest reports on the state of inflation in the economy are set to release, but on the heels of a strong week for stock indexes, investors are feeling optimistic.

On the heels of that optimism, index values rose this morning. The Dow Jones, in particular, picked up 128 points, a 0.4% increase, while the S&P 500 and Nasdaq both managed 0.6% gains individually. However, there is no guarantee that these rises will continue once the latest inflation reports release. Federal Reserve Chairman Jerome Powell has repeatedly stressed his intent to clamp down on inflation, which likely means more rate hikes are coming. Right now, rather than an end to hikes, investors are banking on lower hikes that will affect their investments less.

“We see the relief in equity prices and the recent broad Dollar correction continue into the week, as markets eye short-term peak central bank hawkishness and positioning is relatively defensive,” Citigroup strategist Ebrahim Rahbari told clients.

August’s consumer price index report is scheduled to be released tomorrow, with retail sales and industrial production reports to follow on Thursday. These data points will be major factors for the Fed’s report, and as such, could cause major stock swings when they’re released.

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4 weeks ago