U.S. Stocks Likely To Extend Rebound After Tamer-Than-Expected Inflation Data

Stocks are likely to move to the upside in early trading on Wednesday, extending the rebound seen over the two previous sessions. The major index futures are currently pointing to a notable higher open for the markets, with the S&P 500 futures up by 0.8 percent.

The futures saw a significant surge following the release of a highly anticipated Labor Department report showing consumer prices increased by less than expected in the month of June.

The Labor Department said its consumer price index rose by 0.2 percent in June after inching up by 0.1 percent in May. Economists had expected consumer prices to climb by 0.3 percent.

Excluding food and energy prices, core consumer prices still increased by 0.2 percent in June after rising by 0.4 percent in May. Core consumer prices were also expected to rise by 0.3 percent.

The report also showed the annual rate of consumer price growth slowed to 3.0 percent in June from 4.0 percent in May. Economists had expected the rate of growth to slow to 3.1 percent.

The annual rate of core consumer price growth also decelerated to 4.8 percent in June from 5.3 percent in May. The rate of growth was expected to slow to 5.0 percent.

While the Federal Reserve is still widely expected to raise interest rates by another quarter point later this month, the data has led to renewed optimism that will be the end of the central bank’s rate-hiking cycle.

Later in the day, the Fed is due to release its Beige Book, a compilation of anecdotal evidence on economic conditions in each of the twelve Fed districts.

Stocks moved mostly higher over the course of the trading day on Tuesday, adding to the modest gains posted in the previous session. The major averages all moved to the upside, further offsetting the pullback seen last week.

The major averages reached new highs for the session going into the close. The Dow jumped 317.02 points or 0.9 percent to 34,261.42, the Nasdaq rose 75.22 points or 0.6 percent to 13,760.70 and the S&P 500 climbed 29.73 points or 0.7 percent to 4,439.26.

In overseas trading, stock markets across the Asia-Pacific region turned in a mixed performance during trading on Wednesday. Japan’s Nikkei 225 Index slid by 0.8 percent, while Hong Kong’s Hang Seng Index surged by 1.1 percent.

Meanwhile, the major European markets have all moved to the upside on the day. While the U.K.’s FTSE 100 Index has shot up by 1.4 percent, the German DAX Index is up by 0.7 percent and the French CAC 40 Index is up by 0.7 percent.

In commodities trading, crude oil futures are climbing $0.66 to $75.49 a barrel after jumping $1.84 to $74.83 a barrel on Tuesday. Meanwhile, an ounce of gold is trading at $1,949.70, up $12.60 an ounce compared to the previous session’s close of $1,937.10. On Tuesday, gold rose $6.10.

On the currency front, the U.S. dollar is trading at 139.15 yen compared to the 140.36 yen it fetched at the close of New York trading on Tuesday. Against the euro, the dollar is trading at $1.1060 compared to yesterday’s $1.1009.

Source: Read Full Article