Stock market analysis as investors foresee inflation

The S&P 500 index increased slightly on Monday as investors waited for key inflation data this week. Here is the stock market technical analysis:

Stock market technical analysis

• The general index increased by 0.1% to 4,109.11.
• The Dow Jones Industrial Average gained 101.23 points or 0.3% to 33,586.52.
• Moreover, Nasdaq Composite decreased by 0.03% to end at 12,084.36.
• Tech stocks contended, with Apple stock down by 1.6%
• Google-parent Alphabet is down by 1.8%.
• Tesla shares are down by 0.3% after the company announced that it would again reduce some electric vehicle prices.
• Meanwhile, chipmaker shares rose after Samsung announced it would cut production to prop up prices;
• Micron Technology’s shares are up by 8%

Investors anticipate economic data, CPI, and PPI for March

Investors expect a busy week of economic data, including the latest CPI and PPI data for March – Wednesday and Thursday, respectively. This will help know if or when the Fed will pause or end its rate hike campaign. 

“We are seeing what we think are the same investor narratives of uncertainty surrounding mixed economic data fueling uncertainty about Fed policy and heightened fears – particularly with Friday’s strong jobs data – that the Fed is coping with another interest rate hike could move again.” Said AXS Investments’ Greg Bassuk. “Investors more concerned about possible US recession and markets appear to be under pressure as Fed decision draws closer,” he added. The next Federal Reserve meeting is scheduled for May 2-3. 

Investors are returning from a long holiday weekend and reacting to the March jobs report, released on Good Friday when the New York Stock Exchange was closed. The report points to a buoyant economy and subdued inflation. Both showed signs of weakness in the jobs market earlier in the week.  

Nonfarm payrolls rose 263,000 for the month, roughly in line with the Dow Jones estimate of 238,000, the Labour Department said. Moreover, the unemployment rate declined to 3.5%, contrary to expectations that it would remain at 3.6% from the previous month. 

Investors are also waiting for the first companies to report financial outcomes for the first quarter. The three largest banks, JPMorgan Chase, Wells Fargo, Citigroup, and the largest healthcare company, UnitedHealth Group, will release their reports on Friday. 

Many S&P 500 companies have issued more conservative forecasts for the future over the past earnings season, resulting in an overall low rate of earnings overruns.