The market, which is a little nervous following the recent sharp swings, is predicted to be influenced by a number of significant US inflation figures that are scheduled to be revealed in the coming days.
Despite last week’s sell-off, the US stock market saw a little uptick in trading on Monday, August 12, continuing its upward trend as investors awaited the publication of crucial inflation data later this week. Fears of a protracted war in the Middle East caused crude oil prices to rise for the fifth straight day.
The S&P 500 index struggled throughout the day to fluctuate between declines and advances; at the end, it gained just 0.23 points to close at 5,344.39 points. The Nasdaq index rose 0.21% to 16,780.61 points, with a significant boost from Nvidia shares, which saw a 4% rise. Reaching 39,357.01 points, the Dow Jones index rose 140 points, or 0.36%, higher than before.
The market, which is nervous following recent sharp swings, is anticipated to be impacted by a number of significant US inflation data releases in the next few days.
The US Department of Labor will make available on Wednesday the July Consumer Price Index (CPI) data, which is a crucial gauge of the state of the economy. The data may either strengthen or deepen market fears about the likelihood of a US recession in the wake of last week’s sell-off, which was sparked by a weaker-than-expected July jobs report.
“We think that during the trading session on August 5, a short-term market bottom has been established, or is almost established,” stated Lori Calvasina, chief strategist at RBC Capital Markets. highlighting the fact that following that “red fire” session, significant support milestones were still met.
The three main US stock indices had a little decline last week, but they also gained back the majority of the points they had lost earlier in the week.
The market will get the producer pricing index (PPI) data for July on Tuesday, which is another crucial inflation indicator, prior to Wednesday’s CPI release. Next, on Thursday, the US Department of Commerce will issue the retail sales data.
The price of London’s Brent crude oil futures jumped by 2.64 USD/barrel, or 3.3%, on the energy market, finishing at 82.3 USD/barrel. The closing price of the New York WTI oil futures contract was 80.06 USD/barrel, up 3.22 USD/barrel, or 4.2%.
After the US Department of Defense announced this weekend that it would send cruise missile-equipped submarines to the Middle East—a area that faces the threat of strikes by Iran and its allies against Israel—oil prices increased for the fifth time in a row.
Following assaults that Israel claims were carried out, Iran and Hezbollah, a terrorist group, have promised to exact revenge for the deaths of a senior leader and a military commander. Retaliation may lead to a military confrontation in the Middle East, which would be detrimental to the world’s oil supplies.
The US has the additional authority to put an embargo on Iran’s oil exports; at the moment, Iran supplies 1.5 million barrels of oil per day.
“The spread of conflict in the Middle East is causing the market to become increasingly concerned,” Again Capital fund manager John Kilduff stated.
Because of the escalating tensions in the Middle East and the potential for a sharp reduction in interest rates by the US Federal Reserve (Fed) in September, the price of Brent and WTI oil jumped 3.7% and 4.5%, respectively, last week. Furthermore, weekly jobless data in the US that came in below expectations allayed investors’ worries about the possibility of a recession in the country that consumes the most crude oil globally.
