After Hawkish Powell, Market Rally Faces Big Test Next Week
Investors should brace for fresh turmoil next week as the stock market faces several market-moving events, including key economic data as well as earnings from the major U.S. retailers.
U.S. stocks slipped on Thursday, ending the longest winning streaks for the S&P 500 and the Nasdaq Composite in two years. The benchmark S&P 500 snapped an eight-day run of gains, while the tech-heavy Nasdaq ended a nine-day string of wins.
Stocks sold off after Federal Reserve Chairman Jerome Powell said the central bank is “not confident” it has done enough in the battle against inflation.
With investors growing increasingly uncertain over the Fed’s monetary policy plans, a lot will be on the line during the week ahead.
With Fed Chair Jerome Powell reiterating that his main objective is to bring inflation back under control, next week’s CPI report will likely be key in determining the Fed’s policy moves in the months ahead.
The U.S. government will release the October inflation report on Tuesday at 8:30 AM ET and the number could be hotter than September’s 3.7% year-over-year pace.
As per Investing.com, the consumer price index is forecast to rise 0.1% on the month after edging up 0.4% in September. The headline annual inflation rate is seen rising 3.8%, accelerating from a 3.7% annual pace in the previous month.
Inflation has come down substantially since the summer of 2022, when it peaked at a 40-year high of 9.1%, however, prices have resumed their uptrend in recent months and are still rising at a pace nearly twice the U.S. central bank’s target.
Meanwhile, the October core CPI index — which does not include food and energy prices — is expected to rise 0.3%, matching the same increase seen in the preceding month. Estimates for the
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