US Stock Market Key Points:
- The S&P 500, Dow and Nasdaq 100 shut with losses amidst low buying and selling quantity
- Investors are coming to phrases with the concept that the Fed is totally dedicated to curb inflation even at the price of financial ache
- All eyes are on tomorrow’s Consumer Confidence and NFP knowledge on Friday
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Fed Chairman Jerome Powell unleashed a strong message on the Jackson Hole Economic Symposium on Friday by delivering a loud and clear hawkish assertion that generated shockwaves throughout markets. The Central Bank’s dedication to curb inflation, even on the expense of an financial slowdown, tempered the anticipated pivot that some traders have been ready for, prompting merchants to recalibrate their expectations in regards to the tightening cycle. This sparked a brutal sell-off in threat property.
Today, as traders continued to digest the Fed’s message, main US indices fell sharply on the money open, however trimmed losses because the session progressed. The absence of main knowledge on the Economic Calendarand low liquidity (UK markets have been closed) affected the end result. At the closing bell, the Dow Jones ended with a lack of 0.57%.
The S&P 500 closed 0.67% decrease at 4,030. The Energy Sector superior 1.54% amid greater crude oil prices. The West Texas Intermediate (WTI) closed above the 200 Day MA in the present day, opening the door for a extra bullish value transfer. With the Jackson Hole symposium within the rearview mirror, traders seem like specializing in different catalysts such because the OPEC+ feedback indicating {that a} attainable provide reduce may very well be thought of if the Iran nuclear deal have been to be restored. The oil cartel is scheduled to fulfill once more on September 5th.
WTI Daily Price Chart
Light Crude Oil Futures- WTI Daily Chart Price Prepared Using TradingView
In phrases of sector efficiency, Information Technology led the declines dragged by fears of tighter financial coverage. In this context, the Nasdaq 100 closed with a lack of 0.96%. It is noteworthy to say that the tech index is now marginally buying and selling under the 100 Day Moving Average. Staying under that stage would probably preserve the sellers in management.
Nasdaq100 Daily Chart
Nasdaq 100 Daily Chart Prepared Using TradingView
Also of curiosity is the most recent Commitment of Traders (COT) report on internet positions in S&P 500 futures contracts. As of Tuesday, August 23, forward of the Jackson Hole Economic Symposium, the report revealed that speculators have been nonetheless accumulating bearish bets on the index at a speedy clip, an indication of waning confidence within the inventory market’s restoration. It will probably be fascinating to see how this week’s positioning adjustments following the Fed’s hawkish message on the summit.
S&P 500 Daily Chart and Commitment of Traders Report
Source: Buying and sellingView
Looking forward, the buyer confidence survey, the ISM knowledge and the August non-farm payroll launch will steal the highlight this week. These experiences are anticipated to supply useful info on the state of the economic system, setting the stage for volatility to stay elevated.
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—Written by Cecilia Sanchez-Corona, Research Team, DailyFX
