While a slight decline in U.S. inflation in July, a robust job market, better-than-expected corporate earnings, and the passage of the Inflation Reduction Act helped revive investors’ confidence, concerns over a potential recession, as indicated by the deepening of the yield curve inversion, and weak economic data from some of the influential nations are expected to keep the market under pressure.
Speculations about what Fed Chairman Jerome Powell will signal at the Jackson Hole symposium on Friday have primarily contributed to the yield curve inversion. Moreover, soaring inflation in the UK, weak economic data in China, and rising global food prices and commodity shortages could make investors bearish. Therefore, fundamentally weak stocks could witness a significant decline.
