The U.S. stock index futures were rangebound in the evening of Sunday, showing some level of stability after experiencing wild swings the previous week. Despite initial steep losses, Wall Street managed to end the week on a mostly flat note. This was attributed to a mix of bargain buying and easing fears of a recession.
With key inflation data set to be released this week, investors are eagerly awaiting more cues on the economy and cooling inflation. The upcoming consumer price index inflation data, due on Wednesday, is expected to show a slight cooling in July compared to the prior month. This trend is likely to increase optimism regarding potential interest rate cuts. Although there are differing opinions on the extent of the cut, the Federal Reserve is widely expected to lower rates in September due to signs of a cooling U.S. economy.
Despite the recent turmoil in the market, Wall Street indexes closed higher on Friday, retaining some of the rebound from the previous week’s lows. The fear of a U.S. recession and a significant drop in technology stocks led to steep losses, with the Nasdaq entering correction territory. However, bargain buying and the belief that recession fears may be exaggerated helped the market recover most of its losses. The S&P 500, NASDAQ Composite, and Dow Jones Industrial Average all saw gains at the end of the week.
Apart from the inflation data, investors will also be focusing on upcoming earnings reports. Although the second quarter earnings season is winding down, there are still some significant reports to be released in the coming days. Market participants will closely monitor these developments for further insights into the economic outlook and potential market movements.
While the U.S. stock market experienced significant volatility recently, there seems to be a sense of stabilization and optimism prevailing. The focus on key economic indicators like inflation data and upcoming earnings reports will provide more clarity on the current market conditions and future trends.