After experiencing wild swings last week, U.S. stock index futures were rangebound in evening deals on Sunday, signaling some stability on Wall Street. Despite initial steep losses, the week ended mostly flat due to a mix of bargain buying and easing fears of a recession. Persistent speculation about interest rate cuts also contributed to the stability in stock markets.
This week, all eyes are on the consumer price index (CPI) inflation data scheduled to be released on Wednesday. This data is crucial for gaining insights into the economy and the status of inflation. Expectations are that the reading for July will show a slight cooling from the previous month, which could lead to increased optimism regarding lower interest rates. Currently, investors are divided on whether there will be a 25 basis point or 50 basis point cut in September, but the Federal Reserve is widely anticipated to initiate rate cuts amidst indications of a cooling U.S. economy.
Following signals from the Federal Reserve, Wall Street indexes closed slightly higher on Friday, retaining some of the rebound from the previous week’s lows. A sharp decline in technology stocks and concerns about a possible U.S. recession caused significant losses, with the Nasdaq entering correction territory. However, a wave of bargain buying in tech stocks and the perception that fears of a recession might be exaggerated helped the stock market recover most of its losses, resulting in a flat end to the week. The S&P 500, NASDAQ Composite, and Dow Jones Industrial Average all exhibited modest gains by the end of the week.
Looking ahead, beyond the inflation data scheduled for Wednesday, there are also some earnings reports expected in the coming week. While the second quarter earnings season is winding down, investors will be closely watching both economic indicators and corporate performance to gauge the future trajectory of the stock market. With uncertainties surrounding trade tensions and global economic slowdown, the market will be closely monitoring all data releases and earnings reports for any hints of future trends.