U.S. Inflation Hits Three‑Year High, Fed's Rate Cuts Become More Challenging

The recent surge in inflation to a three‑year high, coupled with the increasing difficulty of Fed rate cuts, could create short‑term uncertainty in the markets. While the S&P 500 (SPX) rose 0.9% within 24 hours, the MACD remains below its signal line and the RSI sits in a mildly overbought zone, signaling potential downward pressure. Although the index is above both the 20‑ and 50‑day moving averages—supporting a long‑term uptrend—the tightening interest‑rate environment may still exert a modest pull on prices in the near term.

The recent surge in U.S. inflation to a three‑year high bolsters the Federal Reserve’s inclination to raise interest rates. This development could keep the U.S. Dollar Index (DXY) under short‑term upward pressure. Technical indicators also support a bullish trend: the RSI is above 70, the MACD is above its signal line, and price remains above both the SMA20 and SMA50. Nevertheless, caution is advised to monitor the risk of an overextended rally. Overall, a modest rise in the DXY is expected over the next one to three days.

US inflation has climbed to a three‑year high, and the Federal Reserve’s tightening of rate‑cut prospects may negatively impact the technology sector. The Nasdaq 100 (NDX) is trading below its 20‑day moving average and its MACD is below the signal line, indicating short‑term downward pressure. The RSI sits at 57, neither in overbought nor oversold territory, yet the overall trend appears to be turning bearish. A modest correction within the next one to three days is expected, but the index remaining above the 50‑day moving average would create a resistance level.