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US Equities Rise on Earnings; Dollar Strengthens Ahead of CPI Data

Market Update - Daniel Ang The Accidental Trader Traders Academy International 7

Wall Street closed higher yesterday, driven by a robust corporate earnings season, with the S&P 500 companies exceeding earnings expectations by 2%. Cost-cutting measures and margin expansion fueled the growth, leading to sales that outperformed expectations by 1%. The Dow Jones Industrial Average ended up 1.2% at 35,473.1, the S&P 500 climbed 0.9% to 4,518.4, and the Nasdaq Composite added 0.6% to close at 13,994.4.

The Dollar Index recovered 0.14% to 102.22 after hitting a one-week low last Friday. Investors are now focused on Thursday’s inflation data, which is anticipated to show a 4.8% annual rise in core consumer prices for July. Early today, the dollar edged higher, reflecting investor caution ahead of the critical U.S. CPI data, while attention in Asia pivoted to China’s trade numbers.

In a sign of growing economic challenges, China reported a sharper-than-expected decline in exports, falling 14.5% in July, following a 12.4% drop in June – the worst reading since early 2020. Imports also decreased from June’s -6.8% to -12.4%, signaling potential deflation in the world’s second-largest economy.

Currency pairs reacted with the AUD/USD slipping 0.34% to 0.6550, NZD/USD dropping the same percentage to $0.6085, GBP/USD declining 0.20% to $1.2756, and EUR/USD weakening 0.1% to $1.0985.

Japan’s real wages fell for the fifteenth consecutive month in June, with the USD/JPY rising 0.55% to 134.25.

Gold prices remained stable in the early Asian hours at $1,934.30/oz for spot gold, while COMEX gold futures held at $1,969.00/oz. Silver was also steady at $23.17/oz after a 2.0% decline overnight.

In energy markets, West Texas Intermediate (WTI) crude oil receded 0.5% to $82.45 per barrel in New York.

The cryptocurrency space showed mixed results. Bitcoin (BTC/USD) traded positively at $29,644, recovering from last week’s low of $28,868. Meanwhile, Ethereum (ETH/USD) touched a 7-week low of $1,801.80, marking its lowest price since June 21.

This market overview reflects a mix of optimism around corporate earnings in the U.S. and caution in the global economy, with investors closely monitoring key economic data for further direction.

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