U.S. Stocks May Lack Direction Ahead Of Inflation Data

wallstreet sep4 13mar23 lt

Following the sell-off seen last week, stocks may struggle for direction in early trading on Monday. The major index futures are currently pointing to a mixed open for the markets, with the S&P 500 futures down by 0.3 percent but the Nasdaq futures up by 0.4 percent.

Traders may be reluctant to make significant moves amid uncertainty about the near-term outlook for the markets.

The sell-off seen last week dragged the Dow down to its lowest closing level in over four months, while the S&P 500 ended last Friday's trading at a two-month closing low.

Traders may also stick to the sidelines ahead of the release of a highly anticipated report on consumer price inflation on Tuesday.

The report is expected to show consumer prices increased by 0.4 percent in February after climbing by 0.5 percent in January.

Core consumer prices, which exclude food and energy prices, are also expected to rise by 0.4 percent in February, matching the increase seen in the previous month.

The annual rate of consumer price growth is expected to slow to 6.0 percent in February from 6.4 percent in January, while the annual rate of core consumer price growth is expected to slow to 5.5 percent from 5.6 percent.

The data could have a significant impact on the outlook for interest rates ahead of next week's Federal Reserve meeting.

U.S. stocks tumbled on Friday and the major averages all ended notably lower as concerns about the potential fallout from the implosions of Silicon Valley Bank (SVB) and Silvergate Capital (SI) triggered a sell-off in the financial sector.

The Dow ended down 345.22 points or 1.1 percent at 31,909.64. The S&P 500 closed lower by 56.73 points or 1.5 percent at 3,861.59, while the Nasdaq dropped 199.47 points or 1.8 percent to settle at 11,138.89.

In overseas trading, stock markets across the Asia-Pacific region turned in a mixed performance during trading on Monday. Japan's Nikkei 225 Index slumped by 1.1 percent, while China's Shanghai Composite Index surged by 1.2 percent.

Meanwhile, the major European markets have all moved sharply lower on the day. While the U.K.'s FTSE 100 Index has tumbled by 2.0 percent, the French CAC 40 Index is down by 2.3 percent and the German DAX Index is down by 2.4 percent.

In commodities trading, crude oil futures are plunging $2.86 to $73.82 a barrel after jumping $0.96 to $76.68 a barrel last Friday. Meanwhile, after soaring $32.60 to $1,867.20 an ounce in the previous session, gold futures are surging $25.70 to $1,892.90 an ounce.

On the currency front, the U.S. dollar is trading at 133.08 yen versus the 135.03 yen it fetched at the close of New York trading on Friday. Against the euro, the dollar is trading at $1.0665 compared to last Friday's $1.0643.

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