The Week Ahead 10th Feb 2025

Stock Market Forecast: What to Expect This Week

The upcoming week is poised to be a pivotal one for investors, with key economic data and central bank decisions taking center stage. Inflation fears are rising ahead of the U.S. Consumer Price Index (CPI) release, which will likely influence Federal Reserve policy and market sentiment.

Key Economic Events

The most anticipated event of the week is the release of the U.S. CPI report for January on February 12. Analysts expect a 0.30% month-over-month increase, slightly lower than December’s 0.40%. The core inflation rate is also expected to rise by 0.30%, up from 0.20%. A hotter-than-expected inflation print could dampen hopes for early rate cuts. Additionally, Fed Chair Jerome Powell’s testimony on February 11 and 12 will provide insights into the central bank’s stance. Investors will also keep an eye on jobless claims and the Producer Price Index (PPI) data to gauge the strength of the labor market and pricing pressures.

Market Performance & Sector Trends

The S&P 500 (-15 points), Dow Jones (-241 points), and Nasdaq (-104 points) posted declines over the past week. However, on a 30-day basis, all three indices remain positive, signaling resilience despite short-term volatility. Sector-wise, technology (+2.25%), real estate (+1.50%), and financials (+1.09%) led the gains, while consumer discretionary (-1.54%) and healthcare (-0.69%) lagged.

Commodity & Dollar Outlook

Gold continued its upward momentum, gaining $53 in the past week, while oil fell by $2 amid supply concerns. The U.S. dollar’s trajectory will largely depend on the CPI data and Powell’s testimony.

Sentiment & Investment Trends

Investor sentiment turned bearish last week, with only 33.33% bullish sentiment compared to 42.86% bearish. Growth stocks continue to outperform value stocks, with demand stabilizing above 127%.

Stock Mark indices

Conclusion

The market’s direction this week will hinge on inflation data and Fed policy signals. A lower-than-expected CPI print could bolster rate-cut expectations, while any upside surprise may trigger volatility across equities and commodities. Investors should brace for potential market swings and focus on defensive sectors if inflation concerns persist.