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US stocks with the E-mini S&P 500, which is down by about 0.3% in the New York trading session, due to concerns about higher expected interest rates.

Producer prices for final demand increased with about 0.7% for January in the month-to-month data set released in the previous week, pointing to a sticky inflation rise that might lead central bankers to keep or raise the pace of interest rate hikes, pressuring the stocks.

Geopolitical tensions between the US and China were around the concerns of investors to keep a bearish bias on the markets while the markets are closed on Monday with lower volume and volatility, leading market participants to lean on the balance extreme of the session for rational scenarios.

Median-term calculations for the month point to a bearish bias for US stock markets with a potential rising dollar and positive volatility which might be seen as a pressure factor. However, the session goes with a bullish mood despite a positive volatility as the market may find buyers around the prior VWAP close level.

The daily interval trades back into the Quarter’s value area may target the developing VWAP for potential core buyers which add to their median-term long positions while the likelihood of a rotation to the lower extreme should be higher for the moment, depending on the upcoming economic data to conclude further actions by the Fed.

The week ahead with home sales, FOMC minutes, price index are the key economic data sets that are monitored closely to shape the clues about the further monetary policy path.

The institutional flow with asset managers and funds are seemingly closed positions with long liquidations and short coverings in the COT data as of January 24, giving the market the balanced behavior on the daily interval around the swing highs, possible due to geopolitical tensions and interest rate clues.

In summary, elevated inflation still pressures with robust jobs data leading to clues about keeping the current monetary policy in place combined with hawkish comments from Fed officials pointing to 50 bps hikes which lead to stronger hints of a bearish stock market.

Daily balanced as investors lean on the extremes on a holiday volume session.

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