FX.co ★ Overview of the US market (06/01/2021)

US stocks were sluggish last week, showing very little changes. Perhaps, this is due to growing fears on US inflation, which continues to exceed expectations. But both the Department of Treasury and the Federal Reserve are unperturbed because they believe that inflation will go back to 2% in 2022.

With regards to additional stimulus, US President Joe Biden's $ 2 trillion proposal was cut to $ 1 trillion, mainly due to pressure from Republicans.

Macroeconomic data, such as reports on orders for durable goods and employment, were also relatively weak, which indicates that even though the US economy is recovering, the rate of growth is slowing.

Last week:

Dow Jones rose 1.0% (300 points) and ranged 34.230 - 34.536 points. It is projected to value around 34.000 - 35.000 points this week;

S&P 500 grew 0.8% (34 points), from 4.170 points to 4.204 points. It is expected to range around 4.100 - 4.300 points;

Nasdaq climbed 1.5% (188 points), from 13.560 points to 13.748 points. It is forecast to reach 13.400 - 14.000 points.

Conclusion: The US market might hit all-time highs soon. The movements will be driven by upcoming reports such as ISM indices and employment data. Reaching the yearly highs will provoke a wave of sell-offs.