U.S. benchmarks have continued their rebound from last week’s healthy pullback. After a quiet overnight session, the S&P is staring down the barrel at its all-time high. The Nasdaq has already set a fresh record for the second straight session.
A very minor shift in the Fed’s rate hike expectations has roiled risk assets and strengthened the U.S. Dollar. Via their dot plot, committee members now anticipate 2 rate hikes through the end of 2023.
Price action roared higher over the last 30 minutes, sending both the S&P and Nasdaq to record levels. The otherwise unenthusiastic session highlights both summer trading and an undertone of caution at elevated levels ahead of Wednesday’s Fed policy decision.
Today’s CPI data is due at 7:30 a.m. CT and has haunted markets all week. With this in sight, the S&P, Nasdaq, and Dow have each struggled to carry bullish tailwinds from last Friday’s Goldilocks jobs report.
This week builds up into Thursday’s monumental inflation data, ECB meeting, and Initial Jobless Claims. Portfolio managers and traders want to be long risk assets such as stocks and commodities, but fear inflation that has begun to run hot.