US Inflation Hits 3-Year High at 4.2% in May

May inflation rising to 4.2%, a 3-year high, could weaken expectations for a Fed rate cut and increase selling pressure in markets. The S&P 500's RSI at 42.9 is in weak territory, with MACD below zero and below its signal line, indicating negative short-term momentum. The price is trading below the 20- and 50-day moving averages, further weakening the technical outlook. While the 2.7% decline over the past 24 hours partially reflects the impact of the news, the higher-than-expected inflation data could trigger additional selling. The downtrend is likely to continue in the short term.

May inflation exceeding expectations at 4.2% has heightened concerns that the Fed may delay interest rate cuts. The sharp 4.7% decline in the NDX and the RSI falling to 41 suggest that selling pressure could persist. The MACD line being below the signal line and in negative territory indicates weak short-term momentum. The price remaining below the 20- and 50-day moving averages makes the technical outlook negative. However, since the market has not yet entered oversold territory, there is also a possibility that the decline may slow down.

Although the high inflation data reinforces expectations that the Fed will continue raising interest rates, it may have a mixed impact on the DXY in the short term. The RSI at 42.9 is in weak territory, and the MACD is below the signal line, indicating downward momentum. The price is trading below the 20- and 50-day moving averages, which weakens the technical outlook. The inflation news could initially push the DXY higher, but weakness in technical indicators and potential profit-taking may lead to a prevailing downward trend.

GLD experienced a sharp decline following the release of higher-than-expected inflation data, with its RSI dropping to 23, entering oversold territory. The MACD remains below the signal line and in negative territory, indicating weak momentum. While the short-term technical outlook is weak, oversold conditions could trigger a potential rebound. However, the higher-than-expected inflation data increases the likelihood of tighter monetary policy by the Fed, which may continue to pressure gold prices. Therefore, the downtrend is expected to persist for some time.