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Market rotation to Cyclical stocks amid volatility
Investors pulled out of growth stocks overnight, continuing with a rotation into cyclical stocks such as financials ahead of PCE data this Friday.
US indices saw volatility; Nasdaq closed lower, Dow hit a record, and Nvidia slipped over 1% ahead of earnings.
In China, PDD holdings Inc saw the biggest drop by 30% after missing Q2 revenue estimates.
WTI rose nearly $3 to $77.17, driven by Middle East tensions and Libya halting oil production.
In Stocks
US indices saw intense fluctuations overnight, with the Nasdaq closing in the red, while the Dow notched a record close as cyclical stocks continued to outperform rather than tech stocks.
Nvidia also weighed on the market after slipping more than 1% ahead of its earnings. Meanwhile in China, PDD holdings Inc saw the biggest drop by 30% after missing Q2 revenue estimates.
PCE Data
Markets focus on PCE data for July, with estimates of the core PCE inflation at 1.9% down from 3.9% in May. Powell has indicated that they will be closely watching inflation level to allow for rate cuts starting next month.
In Currencies
The euro edged higher today by about 0.1% to 1.1172 after touching 1.120 overnight in a volatile session. And the sterling also traded close to its recent multi-month highs near $1.3218.
The yen slipped 0.1% to 144.65 per dollar, after reaching a three-week high of 143.45 in the previous session.
In Commodities
WTI was nearly $3 higher, trading around $77.17, continuing an uptrend that began last Friday, supported by escalating tensions in the Middle East. Prices were also supported by Libya’s eastern government halting production.
