Investors brace themselves for a volatile week as crucial inflation data takes center stage, potentially influencing market movements and economic forecasts. The total and core Consumer Price Indexes (CPI) likely rose at a more moderate pace in February, yet annual increases remained steady. The stock futures fell Sunday evening, setting the tone for a challenging week ahead in the financial markets.
The S&P 500 futures dropped by 0.5%, while Nasdaq 100 futures decreased by 0.6%. Futures tied to the Dow Jones Industrial Average slipped by 135 points, or 0.3%, reflecting investor apprehension as they await key economic indicators. The S&P 500 faced its worst weekly mark since September, falling by 3.10%. The Dow and Nasdaq Composite also experienced significant declines of 2.37% and 3.45%, respectively.
Inflation data will dominate the economic calendar this week, with the February consumer price index release scheduled for Wednesday, followed by the producer price index on Thursday. These reports are expected to provide clarity on inflation trends and their impact on the broader economy.
"Inflation data will dominate the economic calendar this week. The total and core Consumer Price Indexes (CPI) likely rose at a more moderate pace in February after sharp increases in the prior month, resulting in annual increases holding roughly steady," – Comerica Bank chief economist Bill Adams.
Additionally, the New York Fed survey of consumer expectations is due on Monday, which will provide insights into consumer sentiment and spending patterns. On Friday, the University of Michigan consumer sentiment reading will offer further perspective on consumer confidence.
Analysts anticipate that producer prices probably rose faster than consumer prices for a second consecutive month, signaling potential challenges for businesses in managing costs. This trend could influence central bank policies and market expectations regarding interest rates and economic growth.
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