Will the stock market turn positive again?!The index is trading below the EMA200 and EMA50 on the four-hour timeframe and is trading in its descending channel. If the index moves down towards the specified demand zone, we can look for further buying opportunities in Nasdaq. A break of the resistance range and the channel ceiling will also cause the Nasdaq to continue its short-term upward trend.
In February 2025, the U.S. labor market grew at a slower pace than anticipated. According to published data, non-farm employment increased by 151,000 jobs in January, while expectations were set at 160,000.This indicates that while job growth continues, its momentum has been weaker than projected.
The unemployment rate rose to 4.1% in February, slightly above the expected 4%. Meanwhile, labor force participation declined by 0.2 percentage points to 62.4%. Average hourly earnings increased by 0.3% during the month, aligning with forecasts. On an annual basis, wage growth reached 4%, slightly below the estimated 4.1%.
Among various sectors, the highest job gains were recorded in healthcare (52,000 jobs), finance (21,000 jobs), and local government (20,000 jobs). Employment also rose in construction, transportation, social assistance, and manufacturing.
Conversely, some industries experienced job losses. The hospitality sector shed 16,000 jobs, retail lost 6,000, and the federal government reduced employment by 10,000 positions. Additionally, temporary jobs declined by 12,000, signaling a potential slowdown in economic growth.
Overall, the report suggests that while the U.S. labor market remains stable, certain indicators, such as rising unemployment and a decline in full-time jobs, may point to a deceleration in economic expansion. Following the report’s release, the U.S. dollar weakened slightly, but the market reaction was muted due to prior concerns over a more significant decline.
Hassett, the White House economic advisor, stated that future reports are likely to show further reductions in government employment. He emphasized the administration’s plan to cut government jobs and spending while boosting employment in the manufacturing sector. He also confirmed that tariffs are inevitable, arguing that such measures will support the expected 3% to 4% economic growth. Hassett expressed doubt that President Trump would grant exemptions for steel tariffs.
As investors try to adjust to Trump’s evolving trade policies, the U.S. Consumer Price Index (CPI) report for February is set to be released on Wednesday. Given the recent Personal Consumption Expenditures (PCE) index data from January, it is possible that CPI could be entering a new downward trend.
The Federal Reserve’s battle against inflation remains challenging, and the recent rise in price pressures has undoubtedly been frustrating for policymakers. However, signs indicate that U.S. inflation may be shifting course, with expectations of a decline in the coming months.
One major uncertainty remains: tariffs. Trump’s decision to impose a 25% tariff on Canadian and Mexican imports and a 20% increase on Chinese goods, along with additional sector-specific and retaliatory tariffs still under discussion, could undermine the Fed’s efforts to bring inflation down to 2%.
In January, the overall CPI climbed to 3%, marking its highest level since June 2024. Core inflation also reached 3.3%. However, February’s data is expected to ease months of concern about inflationary resurgence, with projections indicating a decline in overall CPI to 2.9% and core inflation to 3.1%. Monthly estimates for both indices stand at 0.3%.
Later in the week, Thursday’s Producer Price Index (PPI) for February will provide further insights into inflationary pressures, while on Friday, investors will closely monitor the University of Michigan’s preliminary consumer sentiment survey for March. Last month’s survey raised alarms, as consumer inflation expectations climbed to their highest level in 30 years.
