FX.co ★ U.S. Stocks Close Little Changed Ahead Of Inflation Data

Thursday's trading session saw stocks waver, with the Dow and the S&P 500 attaining fresh record closing highs despite the indecisive atmosphere. The mixed results had the Nasdaq marginally down by 20.06 points (0.1%) to 16,379.46, while the Dow slightly increased by 47.29 points (0.1%) to 39,807.37 and the S&P 500 modestly grew by 5.86 points (0.1%) to 5,254.35.

Throughout the holiday-reduced week, the Dow experienced a 0.8% rise and the S&P 500 a 0.4% growth, though the Nasdaq faced a 0.3% drop. Traders appeared hesitant to make major moves in advance of Friday's release of a Commerce Department report on personal income, spending, and equally important inflation readings, favored by the Federal Reserve.

The inflation figures could influence interest rate prospects, but market responses to the report will be delayed until next Monday due to the Good Friday market closure. The anticipated rise of the annual rate of consumer price growth is predicted to increase to 2.5% in February from January's 2.4%. Concurrently, the annual rate of core consumer price growth is expected to remain stable at 2.8%.

The Friday will also feature a moderated discussion involving Fed Chair Jerome Powell at the Federal Reserve Bank of San Francisco Macroeconomics and Monetary Policy Conference.

Economic data released Thursday from the U.S., while plentiful, was largely overlooked as the focus remained on Friday's inflation readings. These included a report by the Labor Department reporting an unexpected marginal drop in claims for U.S. unemployment benefits for the week ending March 23rd, falling to 210,000 from the revised 212,000 from the previous week, contrary to economists' predictions of a rise to 215,000.

Unexpected GDP growth was reported for the fourth quarter of 2023 by the Commerce Department, with revised data showing a surge of 3.4% compared to the previously predicted 3.2%.

Reports from the National Association of Realtors noted a significant rebound in pending home sales for February, and the University of Michigan recorded an unexpected improvement in U.S. consumer sentiment in March.

Despite the broader market’s uninspiring performance, gold stocks extended their rally, with the NYSE Arca Gold Bugs Index rising by 2.8%, prompting continued strength among gold stocks as the price of gold jumped $25.70 to reach $2,238.40 per ounce. In addition to gold stocks, housing, transportation, and natural gas stocks also exhibited significant strength, although biotechnology stocks experienced some decline.

In international trading, there was a mixed performance across the Asia-Pacific region. Japan’s Nikkei 225 Index fell by 1.5%, contrasting with Hong Kong’s Hang Seng Index and Australia’s S&P/ASX 200 Index, which grew by 0.9% and 1.0% respectively. Europe's major markets experienced minor growth, with the U.K.'s FTSE 100 Index growing by 0.3%, the German DAX Index slightly up by 0.1%, and the French CAC 40 Index remaining relatively flat.In the bond market, there was not a clear trend among treasuries throughout the session, eventually closing with a slight decrease. As a result, the yield on the key ten-year treasury note — inversely correlated with its price — rose marginally by 1 basis point, reaching 4.206 percent.

Looking ahead

Traders may react to inflation data after the long weekend. This could potentially affect the market on the following Monday. Meanwhile, the highlight later in the week is likely to be the monthly jobs report.