Towards the inflation data in the US: declines in contracts on Wall Street

The futures contracts on the US stock exchanges are trading in declines. The contracts on the Dow Jones are down about 0.3%, and the contracts on the Nasdaq and the S&P500 are losing their value by about 0.2%.

The market is now on alert for the publication of the US Consumer Price Index, today at 15:30 (Israel time), following a strong employment report that reduced expectations for interest rate cuts from the Fed. At the same time, recent data showed a slight drop in unemployment claims but a sharp drop in home sales – the sharpest in four years – despite the drop in interest rates.

Forecasts indicate that core inflation (excluding food and energy) is expected to rise at the slowest annual rate since the start of 2021, while the Fed continues a cautious policy, with steady interest rates, in the face of a stabilizing labor market and still high inflation.

Netta Gabrieli, an economist in the research department of Migdal Capital Markets, estimates that “at most two interest rate cuts are expected, which will be concentrated mainly in the second half of 2026”, so that at the end of the year the Bank of Israel’s interest rate will be 3.5%, which she says “leads to the fact that the real interest rate is expected to be positive and restrained throughout the year”.

Last night, Wall Street indices fell across several investment avenues, when concerns about the profitability of technology companies alongside weakness in commodity prices led to considerable losses. The Dow Jones is down by about 1%, the S&P 500 is down by 1.2% and the Nasdaq is down by about 1.9%.

At the top of the parachute stood out Cisco (Cisco) which lost 13% of its value after it issued a conservative forecast for its profit margins, indicating that the rising cost of memory chips is starting to take its toll on the company.

All of the giant’s shares recorded declines, andThe index ETF The follower of the software companies weakened by 2.7%, due, among other things, to concerns in the real estate sector about the effect of artificial intelligence on the demand for offices. Meanwhile, the Anthropic company completed a huge deal to raise $30 billion at a value of $380 billion, in a move that highlights the intensification of competition against OpenAI.

“We have moved from a state of ‘AI-phoria’ (AI-phoria) to a state of ‘AI-phobia’ (AI-phobia),” wrote the strategists of Jordani Research. “For those who experienced the beginning of the internet age, the feeling is of a renewed ‘déjà vu’; both artificial intelligence and the internet are technological changes profound enough to change everyone’s behavior.”

The S&P 500 index is now experiencing a significant upheaval and is trading around the 6,850 point level, down about 1.3% in a single trading day. This retreat takes the index away from the coveted 7,000 mark, which it touched for the first time in history only about two weeks ago (on January 28).

In the dollar-shekel sector – after trading yesterday at a 30-year high, the shekel is losing ground today and is trading at almost 3.09 shekels to the dollar. This, both in light of the declines on Wall Street and in accordance with the trend in the world this morning towards the publication of the price index in the USA.

As for gold – gold prices retreated yesterday in a sudden wave of sales that swept the financial markets, with some traders rushing to sell precious metals to cover losses suffered in the stock markets. The drop did not escape silver and copper either, which recorded sharp declines; Gold lost up to 4.1% of its value while silver plunged by a sharp 11%.

This morning, gold recovered by about 1%, and is again approaching the psychological level of $5,000 per ounce. Silver also recorded a slight recovery this morning with an increase of about 1.7%.

In the Bitcoin sector – yesterday it also did not remain immune and retreated to the $65,500 area, this against the backdrop of a dramatic move by Standard Chartered Bank, which cut the currency’s price forecast for the end of 2026 to only $100,000, while warning that it may continue to fall to the level of $50,000 before stabilizing. Standard Chartered, which was one of the most bullish (optimistic) banks in the market, is now “cooling” expectations, creating further selling pressure in the crypto market. Today the bitcoin recovered a little and its value now stands at a reasonable 67 thousand dollars.

In Europe, trade today is in a mixed trend. The CAC is down by about 0.3%, the DAX is up by about 0.1% and the FTSE is trading stable.

Earlier, trading in Asia closed lower. The Hang Seng fell by about 1.7%, the Nikkei and Shanghai by about 1.2% and the Kospi by about 0.3%.