Wall Street Awaits PPI as Index Futures Enter Consolidation

S&P 500 and Nasdaq futures are trading in a consolidation phase as markets await key US macroeconomic data, with the Producer Price Index (PPI) taking centre stage.

Previous Session

During the previous trading session, both the S&P 500 and Nasdaq finished modestly lower. The S&P 500 (SPX) remained near its all-time high, holding within a local uptrend structure. The Nasdaq (NDQ) continued to trade below the 25,800 level, hovering near the lower boundary of its medium-term ascending channel.

Today’s Market Setup

In today’s session, futures on both indices are showing consolidation dynamics. S&P 500 futures are holding above the 6,900 level, remaining close to record highs. Nasdaq futures are consolidating below a local downward trendline and the 25,900 resistance area, with key support located near 25,500.

Key Drivers to Watch

Market attention is focused on the release of the US Producer Price Index (PPI) for October, alongside retail sales data for November. In addition, December data on existing home sales in the United States is scheduled for release.

Core inflation (Core CPI) stood at 2.6% year-on-year in December, marking the lowest annual increase since March 2021. Investors are also monitoring developments around a potential US Supreme Court ruling on tariffs linked to former President Donald Trump, although a final decision may be delayed.

The fourth-quarter earnings season has begun, with early results from JPMorgan delivering mixed signals.

Sector Performance

Cyclical sectors showed mostly positive performance, led by gains in XLE and XLRE, while XLF and XLY closed lower.

Growth-oriented sectors posted broadly negative moves. The biggest laggards were MJ and SKYY, while SOXX and TAN managed to finish the session slightly higher.

Defensive sectors mostly advanced, with XLP leading gains, while XLV ended the session lower.

Cross-Asset Snapshot

Crude oil is testing a local uptrend line near the 60.5 level after breaking out of a medium-term descending channel.

US Treasury yields remain range-bound, holding below the 4.2% level.

The VIX volatility index has moved closer to the upper boundary of its local ascending channel, approaching the 17 level.

Gold continues to trade near the upper boundary of its ascending channel, holding above the 4,600 level.

Technical analysis by: Lucas Grant, Senior Technical Analyst at Finmire.