US indexes traded lower on Monday with global investors eyeing key US inflation reading and the upcoming week that is packed with potential insights regarding consumers holding up during times of higher borrowing costs. Technology-led index Nasdaq Composite opened lower after the US indexes ended higher Friday as the markets saw second week of gains. While global indexes traded on a mixed note, traders and investors continue to track October Consumer Price Index report which is slated to be released Tuesday. This report should provide a key input to the US Federal Reserve in announcing their interest-rate decisions. Just a quick recap, a range of US Federal Reserve officials in the week gone by dampened the investors’ sentiments as they hinted that more rate hikes might in the offing. When the US Fed kept the rates unchanged, traders and investors had in mind the apex bank is done with their rate-hiking campaign.
Apart from the above data points, the global indexes traded on a mixed note because these indexes were impacted by the cautious tone which was set after there were concerns regarding the US government’s finances. These concerns were brought to notice after Moody’s decision to change its outlook on the debt to “negative” from “stable” and as fears about regarding one more shutdown have increased. One former Fed official highlighted that lawmakers are not interested in resolving the fiscal crisis. This is because the debt situation has been made worse by increased interest rates.
Moody’s stated that it believes that the United States’ fiscal deficits are expected to remain extremely large, which can significantly weaken the country’s debt affordability. Rating agency has affirmed long-term issuer and senior unsecured ratings at “Aaa”.
The Dow Jones Industrial Average was the only index which ended higher, up 0.16%, or exceeding 50 points. With this, the index marked its highest close since 20th September 2023. Other benchmark indexes, S&P 500 and Nasdaq Composite, ended on the weak note as they were down ~0.1% and ~0.2%, respectively. While all eyes are on the October’s Consumer Price Index report, global indexes traded on a mixed note.
As per Bloomberg, the report is expected to show headline inflation of ~3.3%, exhibiting a deceleration from Sept’s 3.7% annual increase in prices.