Following the rally seen in the previous session, stocks are likely to see further upside in early trading on Thursday. The major index futures are currently pointing to a higher open for the markets, with the S&P 500 futures up by 0.4 percent.
While the Federal Reserve lowered its forecast for interest rate cuts this year on Wednesday, stocks may continue to benefit from optimism about the outlook for rates following another tamer than expected inflation reading.
The Labor Department released a report this morning unexpectedly showing a modest decrease by producer prices in the month of May.
The report said the producer price index for final demand dipped by 0.2 percent in May after climbing by 0.5 percent in April. Economists had expected producer prices to inch up by 0.1 percent.
The report also said the annual rate of producer price growth slowed to 2.2 percent in May from an upwardly revised 2.3 percent in April.
Economists had expected the annual rate of producer price growth to accelerate to 2.5 percent from the 2.2 percent originally reported for the previous month.
On the heels of yesterday’s tamer than expected consumer price inflation data, the data may add to optimism Fed officials were being conservative when they forecast just one rate cut this year.
Potentially adding to hopes about future rate cuts, the Labor Department released a separate report showing an unexpected increase by first-time claims for U.S. unemployment benefits in the week ended June 8th.
The report said initial jobless claims climbed to 242,000, an increase of 13,000 from the previous week’s unrevised level of 229,000. Economists had expected jobless claims to edge down to 225,000.
With the unexpected increase, jobless claims reached their highest level since hitting 248,000 in the week ended August 12, 2023.
After an early rally on tamer than expected consumer price inflation data, stocks saw some volatility following the Federal Reserve’s monetary policy announcement but still managed to end Wednesday’s trading mostly higher.
The Nasdaq led the charge, surging 264.89 points or 1.5 percent to a new record closing high of 17,608.44. The S&P 500 also reached a new record closing high, jumping 45.71 points or 0.9 percent to 5,421.03.
At the same time, the narrower Dow gave back ground after an early upward move and eventually ended the day down 35.21 points or 0.1 percent at 38,712.21.
In overseas trading, stock markets across the Asia-Pacific region turned in yet another mixed performance on Thursday. Japan’s Nikkei 225 Index fell by 0.4 percent and China’s Shanghai Composite Index dipped by 0.3 percent, while Hong Kong’s Hang Seng Index and South Korea’s Kospi both jumped by 1.0 percent.
Meanwhile, the major European markets have all moved to the downside on the day. While the U.K.’s FTSE 100 Index has slipped by 0.3 percent, the German DAX Index and the French CAC 40 Index are down by 1.0 percent and 1.1 percent, respectively.
In commodities trading, crude oil futures are falling $0.26 to $78.24 a barrel after climbing $0.60 to $78.50 a barrel on Wednesday. Meanwhile, after surging $28.20 to $2,354.80 an ounce in the previous session, gold futures are slumping $20 to $2,334.80 an ounce.
On the currency front, the U.S. dollar is trading at 156.88 yen versus the 156.72 yen it fetched at the close of New York trading on Wednesday. Against the euro, the dollar is valued at $1.0797 compared to yesterday’s $1.0809.
Business News
U.S. Stocks May See Further Upside As Producer Prices Unexpectedly Dip
2024-06-13 12:51:29
