Stocks are likely to see significant early strength on Wednesday amid a positive reaction to a closely watched report on consumer price inflation. The major index futures are currently pointing to a notably higher open for the markets, with the S&P 500 futures up by 0.8 percent.
The futures surged following the release of a Labor Department report showing U.S. consumer prices were unexpectedly flat in the month of May.
The Labor Department said its consumer price index came in unchanged in May after rising by 0.3 percent in April. Economists had expected consumer prices to inch up by 0.1 percent.
The unchanged reading came as a 3.5 percent nosedive by gasoline prices helped offset a continued increase in prices for shelter.
Excluding food and energy prices, core consumer prices rose by 0.2 percent in May after climbing by 0.3 percent in April. Core prices were expected to increase by another 0.3 percent.
The report also said the annual rate of consumer price growth slowed to 3.3 percent in May from 3.4 percent in April. Economists had expected the pace of growth to remain unchanged.
The annual rate of core consumer price growth also slowed to 3.4 percent in May from 3.6 percent in April. The pace of growth was expected to dip to 3.5 percent.
The slower than expected annual growth rates are likely to lead to renewed optimism about the outlook for interest rates ahead of this afternoon’s monetary policy announcement by the Federal Reserve.
While the Fed is widely expected to leave interest rates unchanged, traders are likely to pay close attention to the accompanying statement as well as officials’ latest projections for the economy and interest rates.
The major U.S. stock indexes all moved to the downside in early trading on Tuesday but turned mixed over the course of the session.
While the Nasdaq and the S&P 500 recovered from the early weakness to reach new record closing highs, the narrower Dow climbed off its worst levels but spent the rest of the day in negative territory.
The Nasdaq jumped 151.07 points or 0.9 percent to 17,343.55 and the S&P 500 rose 14.53 points or 0.3 percent to 5,375.32, but the Dow fell 120.62 points or 0.3 percent to 38,747.42.
In overseas trading, stock markets across the Asia-Pacific region turned in another mixed performance during trading on Wednesday. Japan’s Nikkei 225 Index slid by 0.7 percent, while China’s Shanghai Composite Index rose by 0.3 percent.
Meanwhile, the major European markets have all moved sharply higher on the day. While the German DAX Index has jumped by 1.2 percent, the U.K.’s FTSE 100 Index is up by 1.1 percent and the French CAC 40 Index is up by 1.0 percent.
In commodities trading, crude oil futures are surging $1.04 to $78.94 a barrel after rising $0.16 to $77.90 a barrel on Tuesday. Meanwhile, an ounce of gold is trading at $2,346.10, up $19.50 compared to the previous session’s close of $2,326.60. On Tuesday, gold edged down $0.40.
On the currency front, the U.S. dollar is trading at 156.38 yen compared to the 157.13 yen it fetched at the close of New York trading on Tuesday. Against the euro, the dollar is trading at $1.0818 compared to yesterday’s $1.0741.
Business News
U.S. Stocks May See Initial Surge On Tamer Than Expected Inflation Data
2024-06-12 12:52:05
