NYSE Traders working during the opening bell
Table Content:
US stocks presented a mixed picture at the start of the week, with the S&P 500 and Nasdaq 100 retreating from recent record highs. This pause comes as investors anticipate crucial inflation data and grapple with the implications of an antitrust probe into Nvidia and escalating geopolitical tensions in the Middle East.
Inflation Data Takes Center Stage
The November Consumer Price Index (CPI) report, due Wednesday, is expected to reveal a slight increase from October, with economists forecasting a year-over-year rise to 2.7% from 2.6%. This data, along with the Producer Price Index (PPI) scheduled for Thursday, will heavily influence the Federal Reserve’s interest rate decision at its upcoming policy meeting.
Economists at Bank of America anticipate a 0.2% month-over-month increase in Core CPI. They suggest that a higher reading could significantly impact interest rate policy. “A 0.2% print would likely greenlight a Fed cut in December,” they stated, while cautioning that recent Fed commentary indicates a potential for debate and uncertainty regarding future cuts.
Current market expectations, as reflected by the CME FedWatch tool, price in an 86% probability of a 25 basis point interest rate reduction by the Fed next week.
Nvidia Probe and Geopolitical Tensions Add to Uncertainty
Nvidia’s stock experienced a decline after Chinese regulators announced an antitrust investigation into the company’s acquisition of chip design firm Mellanox. Shares fell as much as 3% in early trading.
Simultaneously, the unexpected collapse of the Assad regime in Syria over the weekend introduced renewed geopolitical instability to the Middle East. The ousting of Syrian President Bashar al-Assad and his family’s flight to Russia have sent ripples through energy markets, pushing prices upward.
Market Performance at Opening Bell
At the opening bell on Monday, major US indexes showed the following performance:
- S&P 500: 6,084.15, down 0.10%
- Dow Jones Industrial Average: 44,654.60, up 0.03% (+12.08 points)
- Nasdaq Composite: 19,861.26, up 0.01%
Commodities, Bonds, and Crypto React
The geopolitical turmoil and market uncertainty influenced various asset classes:
- West Texas Intermediate crude oil rose 1.64% to $68.30 a barrel.
- Brent crude, the international benchmark, climbed 1.43% to $72.14 a barrel.
- Gold increased 1.06% to $2,687.90 an ounce.
- The 10-year Treasury yield remained flat at 4.173%.
- Bitcoin fell 2.10% to $99,060.
Conclusion: A Week of Watchful Waiting
This week promises significant developments that could reshape market trajectory. Investors are keenly focused on the upcoming inflation data and its potential impact on the Fed’s interest rate decision. The ongoing Nvidia investigation and the evolving situation in Syria further contribute to a climate of uncertainty, reminding market participants of the complex interplay between economic data and geopolitical events. Market volatility is expected to persist as these critical factors unfold.
