Daily Fundamental Analysis: Global stocks under pressure following hot inflation reading from the US
just now
On February 11, 2025, the U.S. stock indices displayed mixed performance:
- S&P 500: Closed at 6,068.50, gaining 2.06 points (less than 0.1%).
- Dow Jones Industrial Average (DJIA): Rose by 123.24 points (0.3%), ending at 44,593.65, maintaining its steady trajectory and nearing its all-time high of 45,069.65.
- Nasdaq Composite: Declined by 70.41 points (0.4%), closing at 19,643.86.
Daily Overview
The DJIA remains resilient and continues to hover near its all-time high. The stability of the U.S. dollar is also contributing to a risk-on market sentiment, encouraging investment in equities.
4-Hour Analysis
Current levels are above the 50% equilibrium of the range, signaling a bullish environment with upside potential.
Nasdaq & S&P 500
Similar bullish sentiment extends to the Nasdaq and S&P 500, reflecting positive market momentum despite the Nasdaq's minor decline.
Economic and Policy Influences
- U.S. Tariffs: The announcement of 25% tariffs on all foreign steel and aluminum imports is closely monitored. While this affects exporters like South Korea and Japan, the broader economic impact may be limited due to their diversified export portfolios. Investors are weighing the possibility of trade tensions, although many believe the tariffs are a strategic negotiation tool rather than a permanent measure.
- Federal Reserve Outlook: Federal Reserve Chair Jerome Powell emphasized a cautious approach to interest rate adjustments, balancing economic growth with inflation control. This steady stance has contributed to cautious optimism among investors.
Upcoming CPI Schedule and Expectations
The U.S. Bureau of Labor Statistics (BLS) will release the January 2025 Consumer Price Index (CPI) data on February 12, 2025, at 8:30 AM Eastern Time. Economists anticipate:
- Headline CPI: An expected year-over-year increase of 2.9%, consistent with December 2024's rate.
- Core CPI (excluding food and energy): A projected year-over-year rise of 3.2%, matching the previous month's figure.
These projections suggest that inflation remains elevated, partly influenced by recent tariffs on steel and aluminum imports, which could exert upward pressure on prices. The Federal Reserve's cautious approach to interest rates also plays a role in the current economic landscape.
Key Takeaways
- The S&P 500 and DJIA posted modest gains, while the Nasdaq Composite faced slight declines.
- U.S. tariff policies and the upcoming CPI release are under scrutiny for potential economic impacts.
- The Federal Reserve maintains a balanced stance on interest rates, supporting economic growth and managing inflation.
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