Financial markets and the US dollar are holding steady following the release of US CPI data, which showed a decrease in inflation to a three-year low of 3.6%. This drop in inflation has raised expectations for a potential interest rate cut by the Federal Reserve. However, since the initial positive reaction to the CPI data, the stock market has been stagnant, with minimal movement in major indices like the S&P 500 and Nasdaq.
Investors are now turning their attention to the upcoming release of the minutes from the May meeting of the Federal Reserve’s policy-setting Federal Open Market Committee (FOMC). Analysts are keen to see if there is any indication of officials’ concerns about inflation and whether there is any consideration of resuming rate hikes.
Additionally, market participants are awaiting the first-quarter earnings report from Nvidia (NVDA), a company known for its involvement in the artificial intelligence industry. Investors are particularly interested in Nvidia’s guidance for future performance, as the company has a history of surpassing earnings expectations. However, there is a possibility of a risk aversion response if Nvidia’s momentum starts to cool.
Overall, the financial markets are currently in a state of calm following the US CPI data, with investors looking for clues from the FOMC meeting minutes and Nvidia’s earnings to reignite momentum. The stock market’s lackluster performance post-CPI release suggests that investors are cautious and waiting for more clarity on the economy’s future direction.
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