Wall Street’s main indexes ended sharply lower on Friday, as the possibility of steeper interest rate hikes worried investors while tensions between Ukraine and Russia escalated.
The U.S. Bureau of Labor Statistics announced last week that the U.S. consumer price index for January reached its highest level since February 1982, which prompted questions over the potential size of the boost to interest rates.
Consumer price inflation rose to a 7.5% annual rate in January, and Morgan Stanley expects that the Fed would set out a more aggressive tone to fight inflation.
The U.S. Federal Reserve is likely to meet market expectations for a 25-basis-point rate hike in March, while Fed Chairman Jerome Powell said that there is more room for further policy tightening without hurting employment.
On Friday, the U.S. State Department urged Americans to leave Ukraine as tensions between Ukraine and Russia escalated. Jay Hatfield, chief investment officer at Infrastructure Capital Management in New York, said:
If Ukraine is attacked, it adds more credence to our view that the Fed will be more dovish than the market currently believes, as the war would make the outlook even more uncertain.
On the other side, many big companies reported strong quarterly results, and investors’ focus will also remain on the quarterly earnings reports because many companies have yet to publish their reports.
Next week, Arista Networks, Airbnb, Roblox Corporation, Upstart Holdings, Barrick Gold, The Kraft Heinz, Shopify, Cisco Systems, Palantir Technologies, Nvidia, and Walmart are among the companies scheduled to report quarterly results.
S&P 500 down -1.82% on a weekly basis
For the week, S&P 500 (SPX ) weakened by -1.82% amid increasing concerns about inflation and tensions between Ukraine and Russia.
The S&P 500 closed the week below 4,500 points, and if the price falls below 4,300 points, the next target could be 4,200 points.
The upside potential remains limited for the week ahead; still, if the price jumps above 4,550 points, the next target could be 4,600 points.
DJIA down -1% on a weekly basis
The Dow Jones Industrial Average (DJIA) weakened -1% for the week and closed at 34,738 points.
The current support level stands at 34,500 points, and if the price falls below this level, the next target could be 34,000 points.
Nasdaq Composite down -2.18% on a weekly basis
Nasdaq Composite (COMP) has lost -2.18% on a weekly basis and closed the week below 14,000 points.
The current support level stands around 13,500 points, and if the price falls below this level, it would be a “sell” signal, and we have the open way to 13,000 points.
The upside potential remains limited for the week ahead; still, if the price jumps above 14,500 points, Nasdaq Composite could reach 15,000 points again.
Summary
The Dow Jones, the S&P 500, and the Nasdaq ended sharply lower on Friday, as the possibility of steeper interest rate hikes worried investors while tensions between Ukraine and Russia escalated. The U.S. Bureau of Labor Statistics announced last week that the U.S. consumer price index for January reached its highest level since February 1982, and the upside potential remains limited for the week ahead.
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from Market Analysis – Invezz
