SPX 500

Market reactions over the past 24 hours have been well covered. But the VIX is worthy of a closer look, given it just posted its strongest single-day rally on record.

It’s been a busy and messy week across global macro markets. The push points behind the tumult are parsed through in this piece.

The robust rally in the first half of the year set high expectations, particularly in the technology sector. While some sector rotation into energy and financials occurred last week, it wasn't sufficient to prevent a broader market decline. Disappointing earnings from key players like Alphabet and Tesla have led to revised investor expectations.

Investors are turning their attention to US earnings with 29% of the S&P 500 companies set to report their results this week. Tonight, we will hear from two of the “Magnificent Seven” tech stocks, Alphabet and Tesla, which could impact the S&P 500 forecast.

U.S. stocks rose on Monday as the market considered the latest developments surrounding the US elections and Republican nominee Donald Trump's odds of a second term as President. Biden announced that he was stepping down from the race, endorsing Vice President Kamala Harris. The market is also looking to earnings & core PCE inflation data later in the week.

While the tech sector's struggles have dominated headlines, it's crucial to note that the broader stock market's performance is not solely dependent on the "magnificent 7" group of tech stocks. The Dow Jones Industrial Average reached its fourth consecutive record high on Wednesday, driven by sector rotation. The small-cap Russell 2000 index has also posted substantial gains lately, spurred by last week's inflation report showing consumer prices falling to 3.0% year-over-year in June.

U.S. stocks point to a modestly stronger start as investors digest hotter-than-expected producer price inflation and the start of earnings season. JP Morgan & Citigroup impressed, while Wells Fargo Group posted disappointing net interest income. PPI was hotter than expected, serving as a reminder of how fragile the inflation outlook is.

Traders and economists expect the US CPI report to fall to 3.1% y/y on a headline basis, with the “Core” (ex-food and -energy) reading expected to hold steady at 3.4% y/y.

U.S. stocks are heading for a muted start as the dust settles on last week's inflation data and Federal Reserve interest rate decision. There is no high-impacting data today, so attention will be on tomorrow's retail sales data and Fed speakers for more clues about when the Fed could start cutting rates. Last week, the Fed pointed to one rate cut this year. However, the market is still pricing in two rate cuts.

Supporting stocks today was news of another weaker-than-expected inflation report. Treasury yields fell as a slowdown in producer prices measure of inflation bolstered the case for the Federal Reserve to cut rates this year.

S&P 500 rises to a new ATH after inflation cooled by more than expected in May. The data comes ahead to the FOMC rate decision, where the Fed is expected to leave rates unchanged but could downwardly revise the doy plot from 3 rate cuts this year to 2 or even 1 cut. Attention will also be on the updated projections and Fed Chair Powell's press- conference. A cautious tone could see stocks give back some of their gains.

US stocks are pointing to a lower start in jittery trade as the Federal Reserve's two-day monetary policy meeting begins. With no high-impacting data today, attention is firmly on tomorrow's CPI print and the FOMC decision a few hours later. The Fed is expected to leave policy unchanged so attention will be on the dot plot and projections. Separately, Apple's unveiling of its AI strategy received a lukewarm reaction from Wall Street.

US stocks are heading for a muted open as investors digest more signs of weakness in the labour market ahead of tomorrow's non-farm payroll report. Jobless claims rose by 229k, and came after weaker-than-expected ADP payrolls and job openings earlier in the week. A cooling labour market could give the Fed more reason to cut rates sooner.

US stocks are set to rise after weak ADP payroll data fuels expectations that the Federal Reserve could start cutting interest rates sooner. Recent US data has surprised to the downside, pointing to a slowing economy as high rates bite. US ISM services PMI data is due shortly, and further weakness to help stocks closer to another ATH. Oil prices are hovering around a 4-month low on supply worries and a shaky demand outlook.

US stocks are set for a higher open, starting the month on the front foot. Despite losses in the previous week, the 3 main indices still booked solid gains across May. Attention turns towards a busy week, with ISM services and manufacturing PMIs as well as non-farm payrolls on Friday. Nvidia is under the spotlight after unveiling new releases over the weekend as competition in the sector heats up.

US stocks point to a weaker open after US Q1 GDP was downwardly revised but rate jitters remain. Q1 GDP was lowered to 1.3%. However, this still represents solid growth, giving the Fed few reasons to start cutting rates anytime soon. Attention will be on Fed speakers later ahead of US core PCE tomorrow, which could provide more clues over the timing of the first Fed rate cut.

The short-term S&P 500 outlook could turn bearish if we see some downside follow-through below Thursday’s range when it formed a rather large outside candle after the fresh breakout to a new all-time high was met with strong selling, despite Nvidia’s strong showing.