New York Stock Market Holds Steady Early Amid CPI and FOMC Awaiting... Slight Gains Initially

The three major indices of the U.S. New York stock market are showing slight gains in early trading on the 8th (local time) as they await the upcoming Consumer Price Index (CPI) announcement and the Federal Reserve's (Fed) monetary policy decision next week. In the absence of major market-moving factors, investors are displaying a cautious stance.

At around 10:22 a.m. on the day at the New York Stock Exchange (NYSE), the Dow Jones Industrial Average was up 47.49 points (0.14%) from the previous close, trading around the 33,712 level. The large-cap S&P 500 index rose 4.70 points (0.11%) to 4,272, while the tech-heavy Nasdaq index gained 39.34 points (0.30%) to 13,144.

Currently, within the S&P 500, discretionary consumer goods, staples, healthcare, and technology sectors are rising, while real estate, materials, financials, and utilities sectors are declining. GameStop is down nearly 20% following disappointing quarterly results and news that activist investor Ryan Cohen has been appointed as the new CEO. Wynn Resorts and Las Vegas Sands each fell close to 2% after Jefferies downgraded their investment ratings. Coinbase is showing a slight gain. Lucid is up nearly 1% on reports of its push to enter the Chinese market.

[Image source=Reuters Yonhap News]

Investors are closely watching the market atmosphere as they await next week's U.S. inflation data release and the monetary policy decision at the June FOMC meeting. Barbara Doran, CEO of BD8 Capital Partners, told CNBC, "We are in a bit of a news vacuum," adding, "Earnings season is over, the debt ceiling issue has been resolved, and now we are waiting for the Fed next week." She assessed, "While expectations have spread that the Fed will hold rates steady, the Fed's guidance and how the CPI and Producer Price Index (PPI) will turn out are really important."

In the market, following Australia's surprise rate hike this week, the Bank of Canada also raised rates unexpectedly, fueling concerns that the Fed might also pursue additional tightening due to persistent inflationary pressures. However, the employment data released this morning showed a slowdown, reinforcing signals that the high-intensity tightening is gradually impacting the labor market. According to the U.S. Department of Labor, initial jobless claims last week rose by 28,000 to 261,000, marking the highest level since October 20, 2021, and far exceeding Wall Street expectations of 235,000.

Market consensus favors a rate hold. According to the CME FedWatch tool, the federal funds futures market currently prices in about a 72% chance that the Fed will keep rates unchanged this month. The probability of an additional 0.25 percentage point hike stands at around 27%.

Therefore, the key focus will be on the inflation indicators such as the CPI and PPI to be released next week. Some analysts suggest that if the May CPI does not show a meaningful easing, the Fed's tightening stance could become even more hawkish. Currently, the futures market reflects nearly a 50% chance of a rate hike in July following a hold in June.

In the New York bond market, Treasury yields are declining. The 10-year U.S. Treasury yield stands around 3.74%, while the 2-year Treasury yield, which is sensitive to monetary policy, is at about 4.49%. The dollar index, which measures the value of the U.S. dollar against six major currencies, is trading down more than 0.6% from the previous close at around 103.4.

International crude oil prices are showing weakness. The July West Texas Intermediate (WTI) contract is trading at $72.22 per barrel, down 0.43% from the previous close.

European stock markets are mixed within a narrow range. The UK's FTSE index fell 0.30%, while Germany's DAX and France's CAC indices rose 0.08% and 0.16%, respectively.