S&P500 Forecast :Stocks subdued on higher rates for longer concerns
Stocks are set for a subdued open after a challenging week as a series of upbeat data raised expectations that the Fed may need to keep rates higher for longer. USD is set to book an 8th straight weekly rise, its longest weekly winning run in 9 years.
Share this:
US futures
Dow futures -0.10% at 34448
S&P futures -0.17% at 4444
Nasdaq futures -0.23% at 15224
In Europe
FTSE -0.14% at 7432
Dax -0.35% at 15656
- Upbeat data this week boosted hawkish Fed bets
- Apple remains in the spotlight
- USD set to book longest stretch of weekly gains in 9 years
- Oil rises 2% across the week on supply concerns
Upbeat data this week boosted bets of higher rates for longer
US stocks are pointing to a weaker open amid renewed concerns over the future path of interest rates.
A series of stronger-than-expected data points this week, including a jump in the ISM services PMI and a fall in initial jobless claims, have raised concerns that the Federal Reserve may need to keep interest rates higher for longer or potentially raise interest rates again before the end of the year.
The tech sector has been most heavily impacted by the prospect of a more hawkish Fed, with the Nasdaq falling over 2% this week.
The Federal Reserve is still widely expected to keep interest rates on hold in the September meeting but given the resilience in US economy, a hike in November is not off the table. Dallas Federal Reserve president Lori Logan confirmed this on Thursday by saying that the Fed still has work left to do.
The US economic calendar is quiet today. Federal Reserve Official Michael Barr is due to speak later. Attention will start to turn to US inflation data, which is due to be released next week.
Corporate news
Apple Will remain in the spotlight for another session after the world's most valuable company has seen around $200 billion wiped from its market cap in just two days. Reports that China is curbing iPhone use by state employees have hit the stock hard. The restrictions point to a slowdown in Apple's sales just as the firm is set to launch its new range of iPhones next week.
DocuSign is rising after the e-signature firm beat quarterly revenue and earnings forecasts. Revenue rose 10.5%, and management lifted the annual revenue forecast.
S&P500 forecast – technical analysis
The S&P 500 is finding support at 4430, yesterday’s low, and has recovered slightly to 4450, the June high. Should the recovery continue, buyers could look for a rise towards the 50 sma at 4480 before bringing 4540 the September high back into play. Sellers would need to break below 4430 to extend the bearish run toward 4404, the weekly low.
FX markets – USD falls, GBP rises
The USD trades modestly lower after seven straight winning days. The greenback is on track to rise across the week marking its eighth straight week of gains, the longest winning run since 2014. The USD has been boosted by upbeat data and rising expectations of another rate hike from the Fed this year.
EURUSD is holding steady around 1.07, a three-month low after German inflation cooled to 6.1% YoY in August, down from 6.2%. The data comes after a series of softer data across the week from the region, which has investors questioning whether the ECB will hike rates again at the meeting next week.
GBPUSD is hovering around a three-month low on bets that the Bank of England is close to ending its right hiking cycle. Industry data showed that UK employers are curbing hiring at the fastest pace in over three years in a sign that the labour market is cooling. Starting salaries rose at the slowest pace since March 2021, which could point to record wage growth cooling in the coming months.
EUR/USD +0.05% at 1.07
GBP/USD +0.07% at 1.2485
Oil is set for another weekly gain
Oil prices are rising mildly and are set to book gains of over 2% across the week, putting gains in September already at over 4%.
Oil continues to be supported by the news that Saudi Arabia and Russia will extend supply cuts of a combined 1.3 million barrels per day until the end of the year.
The prospect of tighter supply has lifted oil prices however, concerns over the demand outlook, particularly in China, could limit the upside for oil. Recent data from China this week has added to mounting evidence that the economic recovery is faltering in the world's largest importer of oil.
Meanwhile, the stronger U.S. dollar is also pressuring oil prices. The US dollar trades at a six-month high, which makes it more expensive for buyers of crude oil in foreign currencies.
Looking ahead, the Baker Hughes rig count will be in focus.
WTI crude trades +0.7% at $87.02
Brent trades +0.7% at $90.40
Looking ahead
18:00 US Baker Hughes Oil Rig count
Open an account in minutes
Experience award-winning platforms with fast and secure execution, and enjoy tight spreads from 0.5 pts on FX and 0.3 pts on indices.
Economic calendar
Web Trader platform
Our sophisticated web-based platform is packed with features.
Related articles
Dow Jones Forecast: DJIA rises after weaker jobs data
U.S. stocks are rising after weaker-than-expected U.S. jobs data saw markets rein in rate hike expectations.
Nasdaq 100 Forecast: NDX slips as Treasury yields keep rising
U.S. stocks are falling at the start of Q4, as gains in software stocks offset concerns over soaring Treasury yields. U.S. Treasury yields continue to rise, with the 10-year yield up 2 basis points at 5.31% and the 30-year at 5.66%, multi-decade highs.
S&P 500 Forecast: SPX Continues to Drift Away from Record Highs
Recent trading sessions have done little to restore confidence in the equity market. Over the last four sessions, the S&P 500 has declined by nearly 1.00%, a move that highlights growing short-term weakness and keeps the index moving further away from its record-high territory.
This report is intended for general circulation only. It should not be construed as a recommendation, or an offer (or solicitation of an offer) to buy or sell any financial products. The information provided does not take into account your specific investment objectives, financial situation or particular needs. Before you act on any recommendation that may be contained in this report, independent advice ought to be sought from a financial adviser regarding the suitability of the investment product, taking into account your specific investment objectives, financial situation or particular needs.
StoneX Financial Pte. Ltd., may distribute reports produced by its respective foreign entities or affiliates within the StoneX group of companies or third parties pursuant to an arrangement under Regulation 32C of the Financial Advisers Regulations. Where the report is distributed to a person in Singapore who is not an accredited investor, expert investor or an institutional investor (as defined in the Securities Futures Act), StoneX Financial Pte. Ltd. accepts legal responsibility to such persons for the contents of the report only to the extent required by law. Singapore recipients should contact StoneX Financial Pte. Ltd. at 6826 9988 for matters arising from, or in connection with the report.
In the case of all other recipients of this report, to the extent permitted by applicable laws and regulations neither StoneX Financial Pte. Ltd. nor its associated companies will be responsible or liable for any loss or damage incurred arising out of, or in connection with, any use of the information contained in this report and all such liability is hereby expressly disclaimed. No representation or warranty is made, express or implied, that the content of this report is complete or accurate.
StoneX Financial Pte. Ltd. is not under any obligation to update this report.
Trading CFDs carries a high level of risk that may not be suitable for some investors. Consider your investment objectives, level of experience, financial resources, risk appetite and other relevant circumstances carefully. The possibility exists that you could lose some or all of your investments, including your initial deposits. If in doubt, please seek independent expert advice. Visit www.forex.com/en-sg/terms-and-policies for the complete Risk Disclosure Statement.