US Stock Market Highlights:

• TheS&P500 and the Nasdaq 100 fall for the sixth day in a row amid growing concerns about growth
• September PPI figure slightly above expectations
• All eyes are on tomorrow’s CPI report

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The commitment of central banks around the world to fight inflation and the associated increases in interest rates to achieve this goal are raising concerns about global growth. In this environment, safe-haven assets tend to perform better than riskier equity investments. Today, markets consolidated in anticipation of tomorrow’s US CPI, which could have a significant impact on future monetary policy decisions and the trajectory of assets.

Earlier in the week, the IMF and World Bank lowered their economic forecasts for 2022 and 2023, pointing out that much of the global economy is heading into recession next year. Today, OPEC followed suit and lowered its oil demand forecast citing high levels of inflation, continued COVID-related shutdowns in China and slowing economies. The announcement marked the fourth decline in demand forecasts since April.

In such an uncertain and gloomy environment, the demand for safe-haven assets tends to increase, while the performance of equity investments tends to deteriorate. Shares closed in negative territory today as investors awaited the release of CPI data tomorrow while digesting a slightly higher than expected September PPI reading.

At the close, the Dow Jones, S&P 500 and Nasdaq 100 all posted losses of 0.10%, 0.33% and 0.53% respectively. Only three of eleven S&P sectors rose with Consumer Staples among the leaders. PepsiCo reported strong quarterly results and raised its 2022 sales and earnings guidance.

On another front, Fed officials maintained a hawkish stance. Minneapolis Fed Chairman Kashkari reaffirmed the FOMC’s commitment to fighting inflation, while stressing that the bar for monetary policy stance is set very high. In addition, the FOMC minutes from the September meeting also suggested that interest rate hikes would continue until a sufficiently restrictive level is reached to then sustain them and assess the impact on the economy. and the financial system.

TECHNICAL PERSPECTIVES

From a technical standpoint, the S&P 500 oscillated between gains and losses during today’s session before ending in negative territory for the sixth consecutive day. Uncertainty and indecision ahead of the CPI are visible. The figure could be crucial for the next monetary policy decision but also for the trajectory of equities. We continue to watch the key support level of 3600, which is close to the 50% Fibonacci retracement level and also converges with the 200 week moving average. If we see a weekly close below 3600, the next floor is seen around 3540-3500

S&P 500 Mini Futures Weekly Chart (ES1)

S&P 500 Mini Futures Chart. Prepared with TradingView

Looking ahead, the September CPI issue is due tomorrow at 8:30 a.m. EDT. Markets are expecting an increase of 8.1% year-on-year, compared to 8.3% in August.

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—Written by Cecilia Sanchez-Corona, Research Team, DailyFX