S&P 500’s Varied Performance

Contrasting the tech sector’s struggles, the S&P 500 technology sector dropped by 1.2%, while the energy sector gained 1.8%, buoyed by rising crude prices. This mixed performance comes after the S&P 500 hit a record high on Tuesday, driven by strong performance from Oracle and tempered reactions to consumer price data.

Inflation and Federal Reserve’s Stance

Investors are currently processing the latest consumer price index data, which indicated a higher-than-expected rise in prices. February’s CPI showed a 0.4% monthly increase and a 3.2% annual rise, slightly above forecasts. Core CPI, excluding food and energy, also rose more than anticipated. Despite inflation rates exceeding the Federal Reserve’s 2% target, there is a growing expectation of interest rate cuts, with the FedWatch Tool indicating a 65% chance of a cut in June.

Market Outlook and Upcoming Data

The market is now looking towards the Federal Reserve’s next meeting, with a focus on their assessment of inflation trends. Additional economic data, including the February producer price index, is expected to provide further insight into inflationary trends.

Short-Term Market Forecast

Given the current economic indicators and the Federal Reserve’s cautious stance on rate cuts, the market outlook remains cautiously optimistic. Investors should expect continued volatility in tech stocks, with potential uplifts in sectors like energy. The overall market trend in the short term is likely to be influenced by upcoming economic data and the Federal Reserve’s policy decisions.

Technical Analysis