U.S. stock indexes fell as disappointing earnings and renewed selling of cryptocurrencies put pressure on risk sentiment ahead of a key inflation report. The dollar rose for the first time in four days.
What’s happening in the stock market
The S&P 500 paused its three-day rally, and the high-tech Nasdaq 100 is leading among major benchmarks. Walt Disney Co. and News Corp. fell after posting results that fell short of expectations, while bitcoin fell to its lowest since November 2020 amid a deepening sell-off in cryptocurrencies.
After the midterm elections didn’t result in a Republican victory, attention shifts to Thursday’s inflation report for clues to the Federal Reserve’s policy-tightening path.
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“Elections matter, but other factors matter more to the markets and the economy,” Keith Lerner, co-director of investments at Truist Wealth, said in a note. – The dynamics of inflation, interest rates, monetary policy, the economy and earnings will continue to have the biggest impact on markets over the next year.” Also exacerbating the situation is the fact that global wheat supplies could become even tighter next year. At the very least, that’s what the CEO of the Teucrium Agricultural ETF Fund believes.
U.S. Inflation
U.S. inflation probably slowed slightly in October, with the consumer price index and the core index, which excludes food and energy, down year-over-year. But with the overall annual inflation rate exceeding forecasts in six of the previous seven months, another surprise could dash hopes of a Fed cut after four rate hikes.
As for the election, investors were expecting Republicans to return to Congress, with the Republican Party taking control of both the House and the Senate. But U.S. voters have reached a verdict: Republicans are seeking control of the House by a smaller margin than predicted, and the race for Senator is still open.
Last week’s key events:
- U.S. Consumer Price Index, U.S. initial jobless claims, Thursday.
- Fed officials Laurie Logan, Esther George, and Loretta Mester speak at Thursday’s events.
- U.S. University of Michigan Consumer Sentiment, Friday.
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