Traders expect the CPI to move lower from 8.5% to 8.1%
Wall Street stocks witnessed a modest bounce overnight following an aggressive sell-off seen in the previous session. The S&P 500 and the Nasdaq Composite gained 0.25% and 0.98%, respectively, while the Dow Jones shed 0.26%, falling for a fourth straight trading session and hitting a fresh multi-month low. As geopolitical risks and economic headwinds continue to persist, US equities remain vulnerable to further losses, with recovery potential looking limited at this stage. In individual stocks, Microsoft and Apple gained 1.86% and 1.61%, respectively, as investors bought tech shares after a major sell-off.
Asian equities were mixed-to-higher on Wednesday after fresh data out of China showed that PPI and CPI came in above expectations. The Shanghai Composite index increased 0.75%, Tokyo’s Nikkei 225 gained less than 0.2%, while South Korean Kospi fell 0.17%. In Japan, the leading indicator index arrived at 101.0 versus 100.9 prior. Elsewhere, New Zealand announced its fully reopening its border on July 31, two months earlier than planned.
In Europe, stocks opened higher on Wednesday, with investor attention turning to US inflation data due later today. Traders expect the CPI to move lower from last month’s 8.5% to 8.1%%. The Stoxx Europe 600 Index was up 0.4% in early deals, struggling to stage a more decisive ascent amid lingering concerns over geopolitics, tightening central bank policies, and fears of a recession.
Meanwhile, the dollar came off twenty-year highs while still holding steady. The USD index finished just below the 104.00 mark overnight to come back under some selling pressure on Wednesday as traders take profit ahead of the US CPI report. Should the figures show that US consumer prices have already peaked, USD bulls will be disappointed as slower price growth suggests the Fed could take a more measured approach towards tightening. Still, weak data won’t be enough to derail the dollar’s wider bullish trend.
