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The information provided on EL7.AI is for educational and informational purposes only and does not constitute financial advice.
Major US stock indices, including the S&P 500, Dow Jones, and Nasdaq, have experienced a significant pullback, breaking below their established ascending channels and technical support levels. Technology stocks and the 'Mag 7' group are facing intensified selling pressure driven by rising bond yields and expectations of Fed balance sheet reductions. This shift reflects growing momentum in the 'Warsh Trade' as markets price in a more hawkish central bank stance.
The equity retreat coincides with a sharp spike in producer inflation, as the US Producer Price Index (PPI) surged by 1.4% month-over-month in May, significantly exceeding the 0.5% forecast per market data. Additionally, the Core PPI rose by 1%, reinforcing concerns that persistent inflationary pressures will necessitate higher-for-longer interest rates, contrasting with the Eurozone's marginal GDP growth of 0.1% recorded in the same period.
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Sign InTraders are closely monitoring liquidity levels as yield volatility persists, with the market focusing on upcoming speeches from Fed officials Collins, Kashkari, and Logan for policy clues. According to the economic calendar, upcoming catalysts include US jobless claims and building permits data, which will be critical in determining if the current technical breakdown leads to a deeper correction.