U.S. Economic Data Influences Market Amid Political Changes

According to PANews, the recent political developments in the United States, with the Republican Party securing victories in the White House and Congress, have added momentum to what is being termed the 'Trump Trade.' However, robust U.S. economic and inflation data are reshaping market expectations regarding the Federal Reserve's pace and extent of interest rate cuts. This week, stronger-than-expected U.S. retail sales data led traders to increase bets on the Federal Reserve pausing rate cuts in December, resulting in a hawkish market reaction. Consequently, U.S. stocks experienced a significant decline, with the S&P 500 index dropping 2.08% for the week, the Nasdaq index falling 3.15%—marking the largest weekly drop in over two months—and the Dow Jones Industrial Average decreasing by 1.24%. As President Trump's cabinet appointments are gradually announced, Wall Street is experiencing varying degrees of upheaval. The prospect of a more cautious Federal Reserve under Trump's administration has contributed to the U.S. dollar index rising for seven consecutive weeks, briefly surpassing the 107 mark. Next week's market focus will include speeches by central bank officials and key economic data such as U.S. initial jobless claims. Notable events include a speech by Bank of Japan Governor Kazuo Ueda on Monday at 12:45 UTC+8, the Eurozone's October CPI annual rate final value and monthly rate preliminary value on Tuesday at 18:00 UTC+8, and U.S. initial jobless claims and the Philadelphia Fed Manufacturing Index on Thursday at 21:00 UTC+8. Additionally, on Friday, Chicago Fed President Austan Goolsbee will participate in a Q&A session at 1:25 UTC+8, Japan's October core CPI annual rate will be released at 7:30 UTC+8, and European Central Bank President Christine Lagarde will speak at the European Banking Congress at 16:30 UTC+8. The U.S. November S&P Global Manufacturing PMI final value and Services PMI final value will be announced at 22:45 UTC+8, followed by the U.S. November one-year inflation rate preliminary value and the University of Michigan Consumer Sentiment Index preliminary value at 23:00 UTC+8. The economic calendar for next week appears relatively light, but if data continues to confirm the resilience of the U.S. economy, gold prices may weaken further amid cooling expectations for Federal Reserve rate cuts. Following the halt in the rally driven by the U.S. elections, stock market investors are shifting their focus to technology stocks and artificial intelligence trades. Nvidia is set to release its earnings report next Wednesday, marking its first report since being included in the Dow Jones Industrial Average. Investors will also keep an eye on Trump's transition plans, including his choices for key cabinet positions, as some initial appointments have led to weakness in sectors such as pharmaceuticals and defense stocks. On Thursday, Federal Reserve Chair Jerome Powell's comments about not rushing to cut rates also contributed to the stock market's decline, suggesting that monetary policy direction may once again become a dominant market factor. The post-election gains in U.S. stocks have already been halved.