Market Flops on PCE Numbers

Market Flops on PCE Numbers

Following a strong finish in the previous session, the S&P 500 futures experienced a gradual descent throughout the overnight session, which persisted into the pre-market session before the 8:30 a.m. Eastern release of the Personal Consumption Expenditures (PCE) report.

Economic Data Hotter Than Expected 

The market dropped quickly when the hotter-than-expected Personal Consumption Expenditures (PCE) report was released, with core PCE year-over-year at 4.7% and the PCE index increasing by 0.6% month-over-month, exceeding the forecasted 0.5%.

At the opening bell, the market experienced a quick rebound following a significant drop, with indexes falling over 1%. However, any upward momentum was met with selling volume, sending the S&P 500 futures down to the 200-day simple moving average (SMA) at 3,950.

Critical Moving Average Holds Market Up, For Now

The S&P 500 futures found support at the 200-day SMA and rallied to the high of the day before facing resistance, resulting in a lack of buying pressure that caused the market to turn back down, similar to the previous session.

The rest of the trading session remained choppy and volatile, with the market making violent moves up and down between the 3,950 and 3,980 levels.

Market Whipsaws to End the Week

As the trading session ended, there was another significant drop followed by a pop, making for a tumultuous end to a bearish week. For the market to begin to recover next week, it will need to regain the psychological 4,000 level and the 21-day exponential moving average (EMA), which sits at 4,060 and is expected to be a formidable resistance level.

Economic Events for Next Week

Next week is relatively light on the economic data front. Some notable events will be the Institute for Supply Management (ISM) Manufacturing report on Wednesday at 10 a.m. Eastern. Thursday, the weekly Initial and Continuing Jobless claim numbers will be released at 8:30 a.m. Eastern. On Friday, the Institute for Supply Management (ISM) Services report will be at 10 a.m. Eastern. There are other little economic events, but these are the ones that have the highest probability of moving the market. 

Another Negative Session to Close the Week

The Nasdaq and the S&P 500 were negative to close the session. The S&P 500 futures closed down 1.09%, falling 44 points, while the Nasdaq futures closed down 1.72%, declining 209 points. The Dow Jones futures followed, closing down 1.14%, falling 378 points.