CPI Cools, But China Chip News Pressures Indices

E-mini S&P (March) / E-mini NQ (March)

S&P, yesterday’s close: Settled at 7001.75, down 14.75

NQ, yesterday’s close: Settled at 25,906.00, down 50.75

U.S. Core CPI was a touch lower than expected yesterday, coming in at +0.2% m/m and +2.6% y/y. E-mini S&P and E-mini NQ futures chopped around, but a path higher emerged before it was reported that China will only approve purchases of NVDA’s H200 chips under special circumstances. This is not the make-or-break news it was a year ago, but the statement’s narrative carries weight and throws cold water over what was a resilient tape this week, having already shrugged off the Powell news and the geopolitical speculation around Iran.

A deluge of economic data continues with U.S. PPI and Retail Sales due at 7:30 am CT, followed by Fed speak throughout the afternoon.

Although E-mini S&P futures set a fresh record high after the CPI report, price action did not trade above Monday’s high intraday. In fact, price action sold off through the opening bell, and this weakness created another failure at rare major four-star resistance in the E-mini NQ. Still, another wave of strength came through before being derailed by the China-H200 news. This creates major three-star resistance in the E-mini S&P at 7014.50-7017.50. With the tape under a bit of pressure this morning, we are watching our Pivot and point of balance in the E-mini S&P very closely (detailed below), and if price action cannot decisively stick above, we are again looking for an opportunity to buy against our next two waves of major three-star support at…