US stocks have reacted with strong volatility to the release of US inflation data, which has been slightly lower than anticipated.
The data was awaited to help determine how monetary policy could develop in the coming months and how it would impact the stock market’s performance.
While inflation data came up lower than expected, it rebounded compared to the previous reading and could create some concerns regarding a resurgence in inflation. The Federal Reserve has mentioned that it could keep its options open at its
last interest rate meeting, and could raise rates again if necessary.
An improvement in expectations regarding monetary policy could fuel appetite for risk and help push the market higher. However, the stock market has been under some pressure lately and could recover if data supports a softer approach from the Federal Reserve.
Traders could continue monitoring the strength of the job market and could also turn their attention to other economic data next week in particular when the FOMC minutes should be released.
The minutes could help investors readjust their expectations regarding monetary policy. However, the release could create significant volatility in the stock market.