Wall Street saw quite a bit of volatility yesterday but ultimately settled higher as US stocks once again kept faith in trading this week. The softer inflation setting from the US CPI and PPI reports helped somewhat, as tech shares managed to recoup losses from the Monday drop.
But with inflation/price data now out of the way, can investors find other avenues for a bit more of breather this week?
Well, we do have US retail sales for June coming up later. However, I doubt that it will have the same kind of impact that we will see from the inflation numbers in the past two days.
And even with the supposed “good” news from the US CPI and PPI reports, I would be remiss not to mention again that the softer numbers owe much to a fall in gasoline prices. So, that sort of knocks the wind out of the sails a little bit on the risk breather this week.
US futures are looking more tentative now with tech shares starting to go on the backfoot again. S&P 500 futures are down 0.1% with Nasdaq futures down 0.5% currently. Dow futures are seen up 0.2% but that only came about after UnitedHealth’s strong earnings report earlier.
After a poor showing yesterday, semiconductors are once again in focus with the likes of Sandisk down 6.6%, Micron down 3.3%, and Intel down 1.5% in pre-market. Chipmakers are also lagging with Nvidia down 1.3% and AMD down 3.0% in pre-market currently.
The US PPI numbers yesterday helped broader markets to look past the recent shakiness in tech shares, but perhaps not today.
10-year Treasury yields are slowly moving up to 4.57% again while the US dollar is also keeping steadier in European morning trade thus far. Inflation worries are still ever present with oil prices continue to settle near $80 for WTI crude and $85 for Brent crude.
So while markets were afforded a breather in recent days, there could still be trouble brewing up ahead to end the week. All it takes is a little bit of a nudge and things could start to come undone again.
It will be a testing moment for some of the tech names above, as they eye a potential break below the June lows. And that might be the trigger to set off a broader selloff across markets in the second half of the week. So, just be wary of that.
This article was written by Justin Low at investinglive.com.
