Market Analysis: The NASDAQ And The US’s Drop In Inflation!

– US inflation fell to 3.3%, down from 3.4%, and below most expectations.

– The NASDAQ trades 1.09% higher than the day’s opening price, reaching an all-time high and gaining 17.30% in 2024.

– 88% of NASDAQ components are trading higher after the latest inflation release, as investors increase exposure to riskier assets.

– The US Dollar Index declines, making it the day’s worst-performing currency due to an expected rate cut in September 2024.

The NASDAQ showed a 0.68% bullish price gap immediately after the US inflation data release. This positive price movement suggests an upward trend and a higher likelihood of a rate cut.

For the first time since November 2023, monthly prices did not increase, bringing inflation down to 3.3%. While the inflation rate is still higher than expectations, it hints at a possible decline in the next 2-3 months. Another encouraging factor is the Core Consumer Price Index, which was lower than expected (0.02%). The Core Inflation Rate in the US is now at 3.4%, the lowest since the COVID-19 pandemic and the Ukraine-Russia conflict.

This low inflation data, particularly the lowest Core CPI in over three years, might prompt the Federal Reserve to adopt a more accommodative stance. Consequently, consumer demand is likely to remain strong, and shares could become more attractive to large institutions. Broadcom, the best-performing NASDAQ stock, rose more than 2.50% before the market opened.

Investors are now focusing on the Federal Reserve’s press conference this afternoon. They are eager to hear a more dovish tone from the Fed and any comments on a potential rate cut in September 2024 or by the end of the year. If the press conference offers further clarity, stocks and the NASDAQ are likely to see additional gains. The latest movement from the CMExchange FedWatch Tool is the probability of a rate cut in september rapidly increasing. The September possibility rose from 50.00% to 62.00%.

ABOUT THE AUTHOR See More

Michalis Efthymiou

HFM’s Market Analyst

Michalis Efthymiou brings over 9 years of extensive experience in the financial services industry across the United Kingdom and Europe. Initially serving as a financial advisor in London for 5 years, he has transitioned into the field of market analysis over the past 4 years.

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