US futures jump as inflation shows signs of easing

US stocks steadied on Wednesday, eyeing new highs as a weak consumer price reading fueled hopes that the Federal Reserve may cut interest rates sooner than expected.

Dow Jones Industrial Average futures (YM=F) rose about 0.4%, while S&P 500 futures (ES=F) rose 0.5%. Futures on the Nasdaq 100 (NQ=F) rose 0.4% following a new peak for technology stocks.

As Yahoo Finance’s Allie Canal reported, the CPI rose 0.3% MoM and 3.4% YoY in April, a slowdown from March. “Core” inflation – which does not include the cost of food and gas – rose at its slowest annual pace in 2024.

Stocks rose on renewed confidence that the U.S. economy is in good enough shape for the Federal Reserve to begin cutting interest rates from their current historic highs. This optimism has led to a renewed bullish trend in the market.

Elsewhere on the macroeconomic front, retail sales fell steadily – exactly – last month, well below Wall Street expectations. The report may raise new questions about the health of American consumers.

Read more: How does the labor market affect inflation?

Meanwhile, the pace has slowed in a frenzied meme stock rally that saw GameStop (GME) and AMC (AMC) prices more than double at one point on Tuesday. Both stocks fell more than 10% in pre-market trading.

He lives3 updates

  • Retail sales flattened in April, falling short of Wall Street expectations

    US consumers showed signs of slowing down in April.

    Retail sales were flat in the month, according to Data from the Ministry of CommerceThis raises concerns about the consumer situation amid steady inflation and rising interest rates.

    This represents a slowdown from the 0.6% monthly increase seen in March. Economists had expected a 0.4% increase in spending, according to Bloomberg data.

    Excluding automobiles and gas, retail sales fell 0.1% last month. Expectations were for an increase of 0.1%.

  • Inflationary pressures eased in April

    Consumer price increases in the United States slowed during April, according to a report from the European Central Bank Latest data Released by the Bureau of Labor Statistics Wednesday morning.

    The Consumer Price Index (CPI) rose 0.3% month-over-month and 3.4% year-over-year in April, a slight slowdown from the 3.5% year-over-year price increase in March and a 0.4% month-over-month increase.

    The monthly increase for April was lower than economists’ expectations of a 0.4% rise. The annual rise in prices matched estimates, according to Bloomberg data.

    On a “core” basis, which excludes the more volatile costs of food and gas, prices in April rose 0.3% from the previous month and 3.6% from a year ago – lower than March data. Both measures met economists’ expectations.

  • Well, at least the reviews aren’t too inflated

    While we’re seeing GameStop (GME) rise another 8% before hitting the market, it’s worth noting that wild bubble moves like this don’t spread throughout the broader market.

    This can be illustrated in this nifty new valuation chart from Goldman Sachs this morning.

    Convincing ratings are still there?Convincing ratings are still there?

    Convincing ratings are still there? (Goldman Sachs)

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