Wall Street heads into a big week after a sharp selloff rattled investors, with inflation data, Apple’s annual developer conference and the highly anticipated SpaceX initial public offering set to dominate market attention.
Stocks ended last week under pressure after a stronger-than-expected US jobs report fueled concerns that the Federal Reserve may need to keep interest rates higher for longer
The Nasdaq suffered its biggest one-day decline in a year on Friday, falling nearly 5%, while the S&P 500 snapped a nine-week winning streak. The spotlight now turns to Wednesday’s Consumer Price Index report, which is expected to show inflation accelerating in May. Economists forecast annual headline CPI to rise to around 4.2%, while core inflation is expected to edge higher to 2.9%.
Thursday’s Producer Price Index report will provide another gauge of price pressures facing the economy. “A hotter-than-expected CPI release could trigger another selloff in stocks, while a cooler reading could see stocks bounce sharply,” said Kathleen Brooks, research director at XTB. The inflation reports arrive after May payrolls increased by 172,000, well above expectations, reinforcing the view that the US economy remains resilient despite elevated borrowing costs. Deutsche Bank said the latest labor market data showed little evidence of deterioration and suggested Federal Reserve officials may become increasingly focused on inflation risks rather than employment concerns.