US Producer Inflation Hits 4-Year High in April

The rise in producer inflation to a four-year high could weaken expectations for a Fed rate cut and create selling pressure in the market. The NDX closed just below its 20-day moving average (29112), which may act as resistance. Although the RSI at 58 is in neutral territory, the MACD remains below the signal line, indicating weak momentum. In the short term, we may see a downward correction in the NDX due to the negative impact of the inflation data. However, I do not expect a sharp decline, as the index managed to stay above its 50-day moving average (28593).

The rise in producer inflation to a four-year high is increasing concerns that the Fed may delay or reverse its interest rate cuts. The SPX is trading just below its 20-day moving average (7394), which could act as resistance. While the RSI is neutral at 54, the MACD remains below the signal line, indicating weak momentum. In the short term, selling pressure may emerge due to inflation pressures and technical resistance, but a sharp decline is not expected.

The rise in US producer inflation to a four-year high strengthens expectations that the Federal Reserve will continue raising interest rates, potentially supporting the DXY. Technically, while the RSI has approached 70, entering overbought territory, the upward crossovers of the MACD and SMAs suggest that short-term bullish momentum may persist. However, the overbought RSI also carries the risk of some profit-taking. Therefore, while an upward trend is expected, caution is advised.