S&P 500 Stocks - Markets are experiencing high uncertainty on Friday morning regarding the expiration of the US debt limit, which is creating a gloomy mood. These concerns are affecting market sentiment ahead of the Federal Reserve's (Fed) anticipated inflation announcement and the US Durable Goods Orders report for April. Today's stock news is summarized directly based on reports and technical analysis from the FxStreet.com website.


Amidst this, S&P 500 Futures saw a slight decline around 4,150, erasing a slight corrective recovery seen a day earlier. Meanwhile, the 10-year and 2-year US Treasury yields were seesawing near their highest levels since early March, around 3.82% and 4.54% at the time of writing. It is worth noting that the US Dollar Index (DXY) has declined from its 2.5-month high to 104.17. Gold prices have also shown a slight corrective recovery and are trading around $1,947. The inability of US policymakers to reach a deal on extending the US debt ceiling indicates the ongoing tension between them. While the latest chatter suggests a gap of $70.0 billion that negotiators need to fill to reach a much-awaited deal, US House Speaker Kevin McCarthy recently announced that no deal has been reached at this time. However, he asserted that they are working towards a solution and will continue to work until the issue is resolved. It is worth noting that the US Treasury Department has warned of a worrisome recession if policymakers fail to reach a deal on extending the US debt ceiling before June. This recession threat shows the serious impact that could occur if no action is taken to address the situation. Upbeat data from the US supports the Federal Reserve’s more hawkish bias and weighs on market sentiment. On Thursday, the second estimate of the US annual Gross Domestic Product (GDP) for the first quarter of 2023 was revised up to 1.3% compared to the initial estimate of 1.0%. Additionally, the Chicago Fed National Activity Index for April increased to 0.07 from the previous reading of -0.37, also beating the market estimate of -0.02. Similarly, the Kansas Fed Manufacturing Activity increased to -2 for May, compared to the previous reading of -21 and analysts’ estimate of -11. It is worth noting that US Pending Home Sales for April increased year-on-year (YoY) but decreased on a monthly basis (MoM) basis. On the other hand, Core Personal Consumption Expenditures also increased to 5.0% in the preliminary reading, compared to the previous reading of 4.9%. However, mixed comments from US Federal Reserve (Fed) policymakers have maintained a hawkish bias and maintained a risk-on profile. In his latest speech, Richmond Fed President Thomas Barkin said, “The Fed is facing a challenging situation and is learning to determine how slowing demand could affect inflation.” However, on the other hand, Boston Federal Reserve President Susan Collins said on Thursday that the Fed is “probably at or near” the time to stop raising interest rates, as reported by Reuters. Going forward, the US debt ceiling negotiations will be crucial to gauge market movements. The outcome of the negotiations will have a significant impact on investor sentiment and financial stability. If a deal on extending the debt ceiling is reached, it could provide relief to the markets and reduce the prevailing uncertainty. In addition, economic data such as the US Durable Goods Orders for April and the Core Personal Consumption Expenditures (PCE) Price Index, which is the Federal Reserve’s preferred indicator of inflation, will also be in focus for traders. Durable Goods Orders provide a snapshot of economic activity and business confidence, while the Core PCE Price Index is used by the Fed to gauge the level of inflation. Strong or positive results from these economic data could provide a boost to market sentiment and boost investor confidence. However, it is worth noting that the market will also continue to monitor developments in the US debt ceiling negotiations and the Fed’s monetary policy, as these factors could have a significant impact on the financial markets as a whole.

 

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This analysis is based on fundamental and technical views from trusted sources, not advice or invitation. Always remember that this content is intended to enrich the reader's information. Always use independent research first regarding other forex information to be used as a reference in your trading.

 

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