US Stocks Fall Ahead of Key Inflation Update – Dow Down 0.45%
The three major US indices all fell in trading on the first day of the week yesterday as investors looked ahead to key inflation data due out later today. The Dow dropped 0.45% to 43,975, the S&P 0.25% to 6,373, and the Nasdaq fell 0.30% to 21,385. The dollar pushed higher against most of the majors, the DXY up 0.35% to 98.52, while Treasury yields edged further north — the 2-year up 0.6 basis points to 3.768% and the 10-year up just 0.2 of a basis point to 4.285%. Oil prices were steady near recent lows as traders await the key meeting of Trump and Putin later this week, with Brent up 0.14% to $66.68 and WTI up 0.16% to $63.98. Gold prices saw the most volatility, falling 1.63% to $3,341.64 by the close on an update from President Trump that tariffs would not be placed on gold bars entering the country.
Inflation Data in Focus for US Markets Today
US markets will be heavily focused on key CPI data due out early in the New York session today. Recent employment data pushed expectations for a September rate cut spiralling higher, with the market now pricing in an 86% chance of a cut at the meeting. However, today’s inflation numbers could either derail those expectations or fully lock them in if they come in off their expected prints. The headline CPI data is expected to show a 0.2% month-on-month increase, with the Core data showing a 0.3% month-on-month increase, while the year-on-year number is expected to increase 0.1% to 2.8%. Any significant deviations from these numbers will see substantial moves in the market as traders reprice Fed rate cut chances.
Busy Day Ahead Across Trading Sessions Today
It is a busy day on the macroeconomic calendar today with major events due out across all three trading sessions. The main focus in the Asian session will be on Australian markets, with the Reserve Bank of Australia due to make its latest rate call. A 25-basis point cut is fully priced in by the market, and another hold would be a major shock. However, traders are expecting volatility around the event, with forward guidance due from the statements and press conference. The initial focus in the European day will be on UK markets with employment data set to drop — the Claimant Count is set to increase by 20k, and the Unemployment Rate remain steady at 4.7%. The main event of the day, however, is due early in the New York session, with the key CPI numbers due, and traders are expecting big moves around the event however the data plays out. Later in the session, we are also scheduled to hear from Fed members Barkin and Schmid.
