Stocks Ease Ahead of Inflation Data; Commodities Mixed, Dollar and Yields Slip on Fed Cut Bets

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Index Update:  Autodesk jumped 10% and Ulta Beauty rose 2.5% in extended trading on strong forecasts, while Dell fell 5% on a weak outlook. Earlier, the S&P 500 hit a record high with a 0.32% gain, the Dow added 0.16%, and the Nasdaq climbed 0.53%, supported by solid economic data and AI optimism. Nvidia’s revenue surged 56%, but its cautious guidance excluding China weighed on shares slightly, though analysts maintained bullish views on AI-driven growth, keeping sector momentum intact.

Market Movers:  On Thursday, the top gainers were CaliberCos Inc. (+162.35%), followed by Offerpad Solutions Inc (+85.42%). On the contrary SciSparc Ltd. (-28.87%), and Accelerant Holdings (-26.36%) declined the most the same day.

Commodities Update:  WTI crude dropped to about $64 per barrel and Brent to $67, both heading for their first monthly loss in four despite remaining on track for a second weekly gain. The decline was driven by expectations of reduced U.S. fuel demand as the summer driving season ends, along with concerns of a global supply glut following the IEA’s forecast of supply outpacing demand and OPEC+ restoring capacity. Geopolitical tensions, including Ukrainian drone strikes on Russian terminals and potential U.S. sanctions, provided some support, while uncertainty persisted over India’s stance on Russian oil imports. Gold traded near $3,410 per ounce, close to a one-month high, marking its strongest monthly performance since April. Prices were supported by a weaker dollar, safe-haven demand, and expectations of rate cuts amid political pressure on the Fed. Market sentiment was reinforced by Fed Governor Christopher Waller’s comments favoring policy easing and focus remained on the upcoming U.S. personal consumption report, expected to show stronger inflation after revised Q2 growth data.

Macro Updates:  US PCE Inflation Expected to Show Mixed Signals

The PCE price index is forecast to rise 0.2% in July, slowing from June’s 0.3%, while core PCE is seen up 0.3%, matching the prior month. On an annual basis, headline PCE is expected to hold at 2.6%, while core PCE is projected to inch up to 2.9%, its highest in five months. The index remains the Federal Reserve’s preferred inflation gauge.

Dollar Steadies Ahead of PCE Data, Faces Biggest Monthly Drop in Over a Year

The dollar index held near 97.9, halting its decline as markets awaited the PCE inflation report, with core PCE expected to rise 2.9% year-on-year in July. Revised Q2 data showed slightly stronger economic growth, while Fed Governor Christopher Waller signaled support for rate cuts starting next month. The dollar is on track to fall over 2% in August, its steepest monthly drop against the euro, sterling, and yen, as traders price in an 86% chance of a 25 bps cut in September.

Bonds Commentary:  The 10-year US Treasury yield held near 4.21%, close to four-month lows, as markets awaited PCE inflation data expected to show core PCE rising 2.9% annually in July. Revised Q2 figures showed slightly stronger growth, while Fed Governor Christopher Waller signaled support for rate cuts starting next month. The yield has fallen about 20 basis points in August as traders price in an 86% chance of a 25 bps cut in September.

Futures Update:  U.S. stock index futures declined, retreating from record highs ahead of key inflation data for more guidance on interest rates. Dow futures fell 0.3%, S&P 500 futures dropped 0.3%, and Nasdaq 100 futures slipped 0.5%. The major indices previously ended higher, with the S&P 500 and Dow closing at record levels. For the month, the Dow is up 3.4%, the S&P 500 has gained 2.6%, and the Nasdaq has advanced 2.8%.

After exhibiting a lack of direction early in the session, stocks mostly moved higher throughout Thursday’s trading day. The S&P 500 increased by 20.44 points, or 0.32%, closing at 6,501.85. From a technical perspective, the index found support at the 21-period simple moving average and remains above this level, indicating the potential for further upward movement in the near term. However, given the week's gains, the index may experience some consolidation with a bearish bias during today’s session. Additionally, the 14-day RSI bounced off the midpoint, hinting at a possible bullish outlook. Key support levels are around 6,366, with resistance expected near 6,555.