The Nasdaq index fell Tuesday at the start of the session after Nvidia suffered a severe setback on Monday and Micron Technology fell around 6% yesterday. The latter lowered the chip and technology stocks following a negative earnings forecast.
The market is waiting for today’s US CPI data. The figures will be relevant to the Fed’s upcoming monetary policy decision.
High inflation, especially in the core CPI, will likely push the Fed to keep interest rate hikes at their highest range. It will also negatively affect the recent recovery in stock markets.
Analysts forecast a 70% chance the Fed will raise interest rates by 75 basis points in September, possibly marking its third consecutive big hike. On the other hand, any decline in the CPI figures would make these expectations disappear and would mean a fall in the yields of treasury bonds and the US Dollar, as well as boost stock indices. Federal Reserve Chairman Jerome Powell stated at his latest press conference that the market is now extremely data dependent.