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Market Update: Stocks Extend Gains on Positive Inflation Data, Dollar Rebounds Amid Economic Swings


Make informed decisions with the most up-to-date and reliable financial data, exclusively provided by vtmarkets.com.

After positive inflation data, stock markets continued their climb, marked by modest gains in the S&P 500, Nasdaq Composite, and Dow Jones Industrial Average. However, despite a notable drop in the producer price index, retail sales declined, painting a mixed economic picture. Corporate highlights included Target’s 18% surge on strong Q3 results and V.F. Corp’s 14% rise post-JPMorgan’s upgrade. Currency markets saw the US dollar rebound after strong retail sales, influencing US Treasury yields and readjusting rate-cut forecasts. EUR/USD faced resistance, while USD/JPY surged and GBP/USD declined amidst varied economic data. Commodity-linked currencies like CAD and AUD held steady amid global growth expectations and the dollar’s resurgence despite falling oil prices.

Stock Market Updates

Wednesday saw stocks maintaining their upward momentum after favorable inflation data. The S&P 500 inched up by 0.16%, reaching 4,502.88 at closing, and the Nasdaq Composite recorded a slight 0.07% rise, closing the day at 14,103.84. The Dow Jones Industrial Average climbed by 0.47%, gaining 163.51 points to close at 34,991.21. The 10-year U.S. Treasury yield rose by 9 basis points, reaching 4.537%, rebounding after slipping below 4.5% previously.

October’s producer price index, a measure of wholesale prices, experienced its most significant drop since April 2020, decreasing by 0.5%. However, retail sales also declined, presenting a mixed picture of economic data. These movements followed a strong prior session triggered by the consumer price index remaining flat for October, contrary to expectations of a slight increase.

In the corporate world, Target’s stocks surged almost 18% after surpassing third-quarter expectations, while V.F. Corp’s shares rose 14% post an upgrade from JPMorgan. Meanwhile, the focus shifted to Washington as lawmakers aimed to avert a government shutdown. The House of Representatives passed a bill for a “laddered” continuing resolution, moving it to the Senate for a vote to avoid a potential federal shutdown by week’s end.

Data by Bloomberg

On Wednesday, the market showed a mix of positive and negative movements across sectors. Sectors like Consumer Staples (+0.70%), Communication Services (+0.60%), and Financials (+0.57%) saw gains, while Information Technology (-0.08%), Utilities (-0.33%), and Energy (-0.34%) experienced slight declines. Overall, the market displayed a balanced but somewhat subdued performance with some sectors in the positive territory and others marginally down.

Currency Market Updates

Recent currency market fluctuations, especially regarding the US dollar, reflect a responsive pattern to economic data and evolving rate forecasts. Following Tuesday’s post-CPI decline, the US dollar index saw a rebound fueled by stronger-than-expected US retail sales. This upward momentum in sales contributed to a rise in US Treasury yields, which helped alleviate the intensified selling pressure on the US currency. As a result, the extreme dovish predictions for Federal Reserve rate cuts in the second quarter of 2024 and beyond were tempered, with the market recalibrating its year-end rate-cut estimates.

The EUR/USD pair encountered a 0.3% drop to 1.0848 amidst the surge in US Treasury yields, unable to breach the resistance level of around 1.0882 for the second consecutive session. In contrast, USD/JPY surged past the 151 mark, targeting the 2022 high at 151.94, buoyed by favorable US-Japan rate spreads and the absence of pronounced dovishness from the Fed or hawkishness from the BoJ. Conversely, GBP/USD faced downward pressure, initially triggered by lower-than-expected UK CPI figures and further exacerbated by the robust performance of US retail sales. Additionally, commodity-linked currencies like CAD and AUD maintained modest gains despite a decline in oil prices, leveraging the rise in global growth expectations prompted by falling rates and the US dollar’s resurgence.

Economic Data
CurrencyDataTime (GMT + 8)Forecast
USDUnemployment Claims21:30221K

Make informed decisions with the most up-to-date and reliable financial data, exclusively provided by vtmarkets.com.