US Stock Market: Bullish sentiment holding ground amidst strong US retail sales data, hot inflation numbers

Are US stock market investors no longer concerned about inflation and rising interest rates? Rising inflation and interest rates were expected to worsen the economy, but new US retail sales data indicate that there hasn’t been much of an impact. Retail sales in the United States increased by 3% in January, compared to an expected 1.9% increase. Separately, industrial production remained unchanged in January. Inflation remains sticky as January inflation came in slightly lower at 6.4% as against 6.5% last seen in December. All this is getting reflected in the investor’s sentiments in the stock market. Till the US consumers are spending, the talk of recession should remain in the back seat.

The major indices rose during the regular session on Wednesday. The Dow gained 0.11%, S&P 500 gained 0.28%, and the Nasdaq Composite gained 0.92% for its third consecutive winning day. Communication services and consumer discretionary led the way in nine of the eleven S&P sectors that advanced.

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On Thursday US stock futures are steady as the market’s bullish sentiment overshadowed strong US retail sales data that suggested further Federal Reserve tightening ahead. Investors are now anticipating weekly producer inflation in the United States. Roku, Cisco Systems, Twilio, Zillow, and Boston Beer rose in extended trading on better-than-expected earnings and revenue figures, while Shopify and Synopsys fell after providing weak forward guidance. Applied Materials, Constellation Energy Corporation, DoorDash, and Dropbox quarterly results are to be announced on February 16.

In recent sessions, traders have been digesting data showing stubbornly high US inflation, strong retail sales, and a robust jobs report. The Vix, a measure of expected S&P 500 volatility, is hovering near 18, well below its long-run average of 20 and the markets are perhaps waiting for a clear direction.