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What’s happening: US stocks closed mixed on Friday, following the release of data on producer prices.
What happened: The Dow Jones index ended the day with gains, closing higher by more than 100 points.
However, the S&P 500 and Nasdaq 100 settled lower, with the tech-heavy index recording losses for two consecutive weeks for the first time in 2023.
Why it matters: The US government said the producer price index rose 0.8% year-over-year in July, compared to a 0.2% rise in the prior month, amid an increase in costs of services. The rise was still lower than projections of 0.7%.
On a monthly basis, US producer prices increased 0.3% in July, recording the biggest rise since January. The figure was also higher than market expectations of 0.2%.
The University of Michigan consumer sentiment fell to 71.2 in August, from 71.6 in the previous month, which was the strongest reading since October 2021 and exceeded market estimates of 71.
Although traders widely expect the Federal Reserve to keep interest rates unchanged for the rest of the year, the latest data releases sparked some speculations of rate hikes in September.
The semiconductor index fell around 2.3% on Friday, weighed by losses in Nvidia’s stock. The index recorded losses for the fourth straight session, falling 5% last week to notch its worst weekly performance since early April.
Amid the major S&P 500 sectors, healthcare and energy recorded gains on Friday. The rise in the energy sector was driven by an increase in crude oil prices amid expectations of tightening supplies.
The Dow Jones index gained 105.25 points, or 0.3%, to close at 35,281.40, while the S&P 500 declined 0.11% to 4,464.05 and the Nasdaq 100 lost 0.67% to settle at 15,028.07. The Dow Jones index ended the week up 0.6%, while the S&P 500 was down around 0.3% for the week.
What to watch: Traders await the release of consumer inflation expectations data from the US today. US consumer inflation expectations for the year ahead had declined for a third straight month to 3.8% in June, the lowest level since April. This is expected to remain unchanged in July.
Context: After several weeks of trading sideways, Bitcoin added around 1.5% to its market valuation over the past seven sessions.
Details: The cryptocurrency market had failed to record any major price movements in either direction over the past few weeks. However, prices remained highly volatile last week.
Bitcoin started the week with sharp losses following a quiet weekend but made steep gains later in the week, with US core inflation, UK GDP growth and China’s balance of trade all coming in better than expected.
The largest crypto by market capitalisation breached the key $30,000 resistance level on Wednesday, reaching its highest price since July 23, but quickly moved back to around $29,500.
Ethereum, the second-largest coin by market capitalisation, also added more than 1% last week, after PayPal announced plans to release an Ethereum-based dollar-denominated stablecoin known as PayPal USD.
What to watch: Investors will watch the global macroeconomic environment, which is expected to provide some direction to cryptocurrency prices ahead.
Other Markets: European indices closed lower on Friday, with the FTSE 100, DAX 40, CAC 40 and STOXX Europe 600 Index down by 1.24%, 1.03%, 1.26% and 1.09%, respectively.
Ukraine pressured the German government to supply Kyiv with Taurus cruise missiles for its defence against Russia. The news sent the safe-haven US dollar index higher this morning.
Ireland’s BNP Paribas Real Estate Construction PMI declined sharply to 45.6 in July, from 50.4 in the previous month, exerting pressure on the EUR/USD forex pair.
Mexico’s industrial production rose by 3.7% year-over-year in June, slowing from a 3.9% surge a month ago, which sent the MXN/USD pair lower in forex trading this morning.
New Zealand’s BusinessNZ Performance of Services Index fell by 1.8 points to 47.8 in July, from 49.6 a month ago, exerting pressure on the NZD/USD forex pair.
Russia’s gross domestic product grew by 4.9% year-over-year in the second quarter, above market expectations of a 4.7% expansion, which sent the RUB/USD pair higher in forex trading this morning.
Germany’s wholesale prices, India’s wholesale prices and consumer inflation rate, Brazil’s IBC-Br index of economic activity and Central Bank of Brazil focus market readout, Canada’s Senior Loan Officer Survey, as well as Turkey’s total motor vehicles production.
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