August Inflation Exceeds Expectations, September Rate Hike Probability Rises to 85%

The higher-than-expected August inflation and the increased probability of a September rate hike to 85% could suppress risk appetite in the short term, creating downward pressure on the SPX. However, with the price trading just above the 20-day SMA (7634) and near the 50-day SMA (7671), selling pressure may remain limited. The RSI at 56 is far from oversold territory, and although the MACD is in negative territory, it is above the signal line, indicating that momentum has not completely deteriorated. The rate hike expectation may already be largely priced in; therefore, a volatile course rather than a sharp decline can be expected. Nevertheless, the news flow increases downside risk in the short term.

August inflation exceeding expectations and the probability of a September rate hike rising to 85% increase downside risk for NDX in the short term. Rate hike expectations put pressure on technology and growth stocks, potentially hurting the index's valuation. Technical indicators show RSI at 54.8 in neutral territory, but MACD below its signal line and price just under SMA20 and SMA50, indicating weak momentum. With the 0.52% decline in the last 24 hours and rate hike expectations, selling pressure is likely to continue in the short term. However, considering that inflation data may be priced in and oversold conditions have not emerged, the decline may be limited.

US inflation surpassing expectations has increased the probability of a September rate hike to 85%, creating short-term upward pressure on the DXY. Technical indicators also support this view: the price is above the SMA20 and SMA50, the RSI is at 55, neutral-positive, and the MACD is just below the signal line but in positive territory. While rate hike expectations support the dollar, the fact that overbought territory is not yet approached suggests that upward potential may be limited. In the 1-3 day horizon, the DXY is likely to move towards the 99.50-100.00 range, but the risk of the news being priced in and possible profit-taking could limit the upside.