US Consumer Inflation Slows More Than Expected in June

The sharper-than-expected slowdown in June inflation could reinforce expectations that the Federal Reserve is nearing the end of its rate hike cycle. This could create a favorable environment, particularly for growth-oriented technology stocks. Although GOOGL shares have recently weakened technically (RSI at 36, price below SMA20 and SMA50), the inflation news may serve as a catalyst for a short-term recovery. However, momentum indicators (MACD below signal line) have not yet signaled a clear reversal, so the upside may remain limited.

The sharper-than-expected slowdown in inflation has increased the likelihood of a Federal Reserve rate cut, sending a positive signal to markets. While the SPX closed above its 50-day moving average (7513), it remains below its 20-day moving average (7544). The RSI is neutral at 45, and the MACD is below the signal line but in positive territory. A short-term upward move may be expected, but the 20-day moving average should be monitored as a resistance level.

The sharper-than-expected slowdown in June inflation strengthens expectations that the Fed may begin cutting interest rates sooner. This creates a positive catalyst for the tech-heavy NDX index. However, the RSI at 38 and the MACD remaining below its signal line suggest limited upside potential in the short term. The index trading below its 20-day moving average (29,612) indicates that this level must be breached for a recovery. Nonetheless, the optimism generated by the inflation news could provide short-term support for the index.

Despite the DXY's RSI14 being in oversold territory at 27.19, inflation slowing more than expected could strengthen Fed rate cut expectations and put pressure on the dollar. The MACD line is below the signal line and in negative territory, indicating that short-term bearish momentum may continue. The price is trading below the 20- and 50-day moving averages, which could act as resistance levels. However, oversold conditions and a 0.4% decline in the last 24 hours increase the likelihood of a short-term bounce, although the news flow may sustain bearish pressure.