Retail Sales and Unemployment Claims

Despite a slump in Wall Street, U.S. retail sales showed resilience, recording a 0.6% increase in February, although slightly below the anticipated 0.8%. Concurrently, unemployment claims dropped to 209,000, falling short of the expected 218,000, signaling strength in the employment sector.

Rate Cut Expectations and Federal Reserve’s Upcoming Meeting

The likelihood of the Federal Reserve initiating a rate cut in June has decreased to 63.5%, as gauged by the CME FedWatch tool. This dip from a previous 67% expectation reflects the market’s response to recent economic data. The Federal Reserve’s policy meeting next week is highly anticipated, with potential cues on the onset of rate easing.

Sector Movements and Key Stock Performance

Real estate led the losses among the S&P 500 sectors, dropping 1.6%. Notably, technology and megacap growth stocks showed slight gains. However, chipmakers, including Nvidia, Intel, and Advanced Micro Devices, faced declines. Robinhood’s shares surged 6% after reporting a 16% increase in assets under custody, while aerospace firm RTX gained 1.9% following an upgrade by Wells Fargo.

Market Outlook

The market faces a bearish short-term outlook, influenced by the higher-than-expected inflation data and the uncertain timing of the Federal Reserve’s rate cuts. The impact of these factors on the bond yields and stock market dynamics, especially in technology and chip sectors, will be crucial in the coming weeks. The Federal Reserve’s meeting and its subsequent decisions will be pivotal in shaping the market trend.

Technical Analysis