Wall Street Braces For Lower Open As Inflation Data Looms, Bitcoin Breaks New Barrier: Why This Analyst Thinks Magnificent 7 Rally Has More Legs

Zinger Key Points
  • As the market rally stalls, traders are likely to keenly watch Tuesday's consumer price inflation report for cues toward monetary policy.
  • Asian stocks ended mostly lower and the gold rally has slowed, with the yellow metal trading flattish early Monday.

U.S. stocks appear headed for a modestly lower open at the start of the week, with index futures pointing downward. Investors are likely focusing on key economic data releases, particularly the February Consumer Price Index (CPI) report due Tuesday. This data is seen as crucial for the Federal Reserve’s upcoming interest rate decision on March 19-20.

The Federal Open Market Committee (FOMC) meeting next week is in the spotlight. Market participants are watching for any signs of a potential rate cut, following recent dovish comments from Federal Reserve Chair Jerome Powell and President Joe Biden‘s suggestion of lower rates at a campaign rally.

Cues From Last Week

Major stock indices closed lower for the week ending March 8. The strong February non-farm payrolls report triggered profit-taking in overvalued tech stocks, despite the S&P 500 reaching a record high on Thursday and the broader market experiencing intraday highs on Friday. This early euphoria faded, leading to a pullback and negative close on Friday.

Performances In Week Ended March 8

IndexPerformance (+/-)Value
Nasdaq Composite-1.17%16,085.11
S&P 500 Index-0.26%5,123.69
Dow Industrials-0.93%38,722.69
Russell 2000+0.30%2,082.71

Analyst Color:

Despite recent volatility in Magnificent Seven stocks, some analysts remain optimistic. “I think their pullback is justified. I think it is more than required because of the gains that they have had,” said Ralph Acampora, director of technical studies at the New York Institute of Finance. “Going forward, they will participate but may not be the leaders they were,” he said.

Acampora also noted a historical pattern of market pullbacks during election years, followed by a rebound later in the year.

Futures Today

Futures Performance On Monday ( as of 6:30 a.m. EDT)

FuturesPerformance (+/-)
Nasdaq 100-0.01%
S&P 500-0.13%

Premarket trading on Monday showed the SPDR S&P 500 ETF Trust SPY down 0.16% to $510.92 and the Invesco QQQ ETF QQQ down 0.03% to $438.87, according to Benzinga Pro data.

The February CPI report on Tuesday is arguably the most critical economic data point of the week. It could be the final piece of information the Fed needs before its March 20 rate decision. 

Other key data releases this week include the producer price index, retail sales, industrial production, Empire State manufacturing survey, jobless claims, and consumer sentiment data.

On Monday, the Treasury will auction three- and six-month notes at 11:30 a.m. EDT and two-year notes at 1 p.m. EDT.

See also: Best Futures Trading Software

Stocks In Focus:

Commodities, Bonds, Other Global Equity Markets:

Crude oil futures rose slightly in early European trading, following a decline last week. The 10-year Treasury yield dipped slightly. Gold prices remained flat, while Bitcoin surged towards $72,000.

Most Asian markets fell on Monday, echoing the negative close on Wall Street. The Japanese market led the decline after a surprise GDP growth report raised concerns about potential monetary tightening by the Bank of Japan. Hong Kong and Chinese markets bucked the trend, however. European markets opened with muted sentiment, with the Euro STOXX 50 Index down over 0.60%.

Read Next: Gold Stocks Could Gain In Catch-Up Rally, Says Peter Schiff: ‘Explosive Move Up Can’t Be Far Away’

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