How Economic Data Moves Markets
Economic data is one of the main fundamental factors that drive price movement in the equity indexes, according to Business Insider.
Governmental policy, geopolitics, and economic data are three fundamental factors that typically drive price movement in the equity indices. Changes in governmental policy and large geopolitical events are not in the foreseeable future. On the other hand, economic data is released to the public on specific dates and past data shows how the markets might move based on how they compared to previous analyst expectations.
Retail sales were negative in February and resulted in a 0.29 percent drop in the S&P500. On the contrary, May showed positive results and the S&P resulted in a 0.33 percent gain.
The most influential piece of economic data that affects the equity markets is the Conference Board's Consumer Confidence measure. In January, a reading of 121.7 resulted in a 0.24 percent gain in the S&P500, but in September a 125.1 reading sent the S&P500 down by 0.96 percent. Consumer confidence, in this case, had a larger effect on market moves than consumer data.
The United States economy has slowed in its growth in 2019, and the markets have responded accordingly with releases of data. Future releases of economic data could have similar effects on equity indices.