S&P500
The US stock market is still in the correctional phase.
On Wednesday, the Dow Jones Industrial Average rose 0.26%, NASDAQ lost 0.24%, and the S&P500 was up by 2%. The S&P500 index futures rose 0.6% on Thursday. This indicates the possibility of a strong US market recovery.
In contrast to the stock market, the dollar showed strong gains on Wednesday.
Asian stock indices showed moderate gains on Thursday. Thus, China's index rose by 0.5%, whereas Japan's index added 0.15%.
The latest survey from the National Bureau of Statistics revealed on Thursday showed China's manufacturing PMI had risen to 50 from 49.5 a month ago.
As for the commodity market, Brent crude was up $1 to $78.50 per barrel. Europe has faced extremely high gas prices. The price reached new highs yesterday at $1,060 per thousand cubic metres. If such prices are set for the long term, EU inflation, energy tariffs and the prices of manufactured goods such as metal and metal products will rise markedly.
S&P500 is trading at 4,360. The expected range is 4,320–4,400. The issue of the US federal debt ceiling as of Thursday morning had not yet been resolved. So far, the Senate has not approved another increase in the US national debt limit. This could leave the US government without funds as early as Thursday night (so-called shutdown). Both parties in the Senate are trying to find a compromise. Republicans are using the funding issue to get concessions on a new $3.5 trillion infrastructure bill. However, no one wants to do any harm to the US economy, thus this problem is likely to be solved today.
The US market is still in correction. The market drop was influenced by a 1.5% rise in US government bond yields.
A new US report on weekly jobless claims will be released on Thursday. Initial Jobless Claims in the United States is expected to be 340k, while continuing claims jumped to 2.85 million. On Friday, the first US business activity reports for September will be released.
USDX is trading at 94.25. The expected range is 94.00–94.40. The dollar index has risen sharply by more than 1% against the major world currencies in two days. On Wednesday, the euro fell to 1.1600 against the dollar. Now the dollar continues to rise and the euro continues to fall
The USD/CAD pair is trading at 1.2730. It is likely to stay in the range of 1.2680–1.2800. The dollar rose slightly against the loonie. Strong pressure from high oil prices is keeping the currency pair from rising.
Conclusion: The US stock market is still in the correctional phase. It is highly likely to jump in the near future.