US stock prices have moved within a narrow range, with the Nasdaq 100 index falling by 0.7% and the S&P 500 index declining, as investors await inflation numbers that could indicate the possibility of interest rate hikes again.

Nasdaq and SP500 decline

The Nasdaq 100 index, which gives relative weight to technology stocks, fell by 0.7%, marking the fifth decline in the past six sessions, while the S&P 500 index declined in the final minutes of the trading session after losing its earlier gains of 0.4%.

Meanwhile, US Treasury yields have risen, with the yield on two-year Treasury bonds reaching 4.03%. Cracks are beginning to show in the rise of US stocks in 2023, as hedge funds and other speculators take the highest level of short investment positions since November 2011 when the US credit rating was downgraded.

Some asset managers have stated that the markets may move within a limited range as the likelihood of an economic recession is being evaluated in the coming period. They have also noted the upcoming inflation report and the possibility of a temporary halt to interest rate hikes after May, as well as several other indicators including manufacturing and employment data.

IMF lowers its global growth expectations

The International Monetary Fund (IMF) has lowered its expectations for global growth due to recent disruptions in the banking sector and the events of the Russian-Ukrainian war.

According to Nuveen’s head of investment affairs, Sarah Malik, despite the Federal Reserve’s temporary pause, they are not in the camp that expects interest rate cuts in 2023.

Alicia Levine, the chief strategist for investment and advisory solutions at BNY Mellon Wealth Management, also said that earnings are likely to decline and profits have barely budged in the past five weeks.

It is clear that the US Federal Reserve will continue its efforts to combat inflation and raise interest rates, despite the control of the labor market and rising oil prices on monetary policymakers, whose mission is to maintain global financial stability.

It is worth noting that the earnings season, which is expected to be the worst in the markets since the most severe periods that affected the markets, will begin on Friday, April 14th.

It is clear that the US Federal Reserve will continue its efforts to raise interest rates despite recent disruptions in the banking sector, a strong labor market, and rising oil prices that affect monetary policymakers focused on the task of maintaining price stability.