U.S. Stocks Retreat Ahead of Key Inflation Data Release

Summary

  • U.S. stocks retreated on Tuesday, erasing some of the tech-inspired gains acquired in the previous session
  • This is due to investors proceeding with caution ahead of the key inflation data announcement set for later in the week
  • Significant movers in the market included Nvidia, Boeing, Match Group, Juniper Networks, and Tilray
  • In the commodities market, crude oil prices rebounded after heavy losses in the previous session

Stock Market Reflects Restraint before CPI Release

Investing.com reports a decline in U.S. stocks on Tuesday. This follows a surge in the previous session driven by technological enhancements. This cautious approach comes ahead of critical inflation data expected later this week.

As of 06:35 ET (11:35 GMT), the market showed a decrease of 255 points, equating to 0.7%. It traded 27 points lower (a decrease of 0.6%), and showed a drop of 90 points, equivalent to 0.6%.

On Monday, chief equity indices showed an uplifting close, bolstered by substantial gains from Nvidia, a chip designer and artificial intelligence frontrunner. This facilitated the tech-centric segment to have its most profitable day since mid-November.

Anticipation Surrounds CPI Data

Nonetheless, investors are exhibiting significant caution preceding the upcoming CPI data release. This data is crucial to indicate future plans of the U.S. central bank regarding interest rates for the first quarter of the new year.

The significant inflation marker shows a rise of 0.2% on a monthly basis, slowing the annual pace down to 3.8%. This is a level that has not been reached since mid-2021.

Recent data conveyed that the U.S. trade deficit contracted unexpectedly in November due to a decline in imports.

Boeing Continues to Draw Attention

In the corporate sector, Boeing’s stock depreciated by 1.3% as United Airlines and Alaska Airlines discovered loose components on some of the manufacturer’s grounded 737 Max 9 jets.

Following a Wall Street Journal report that indicated Elliot Investment Management has acquired roughly $1 billion in shares in Match Group, the company’s stock surged by over 10%.

Juniper Networks saw a dramatic rise in share price of over 20%, following reports of advanced negotiations for acquisition by Hewlett Packard Enterprise. The deal is estimated to be roughly $13 billion.

Shares of cannabis company Tilray gained 5.5% as it reported successful performance in its marijuana and beverage sectors, pushing revenues to a record-breaking maximum.

Crude Prices Revive Ahead of API Data

Crude oil prices bounced back on Tuesday, reversing heavy losses from the previous session. This comeback arises amidst concerns of slow demand and tensions in the Middle East.

By 09:35 ET, futures traded 1.8% higher at $72.02 a barrel. Concurrently, the global standard for oil prices rose by 1.7% to $77.38 a barrel.

On Monday, both crude indices saw a decline of over 3% due to price cuts by Saudi Arabia, sparking worries about demand slow-down from major Asian consumers. Despite this, an ongoing conflict between Israel and Hamas sustains support for the crude market with fears that it may escalate into a regional crisis impacting Middle Eastern oil supplies.

Data on U.S. crude supplies is set to be released by a leading industry body later in the session, before the official figures are released on Wednesday.

In other news, gold rose by 0.4% to reach $2,042.50/oz and the euro traded 0.1% lower at 1.0945.

The developments in U.S. stocks, as well as the upcoming CPI inflation data release, are expected to have significant implications for forex trading. Assets likely to be impacted include U.S. equities and the dollar.

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