U.S. stocks bounce in choppy trade after CPI shows inflation slows less than expected

Major stock indices were higher in turbulent price action after a long-awaited reading of the consumer price index showed that US inflation slowed less than expected in April. .

How are stock index futures traded?
  • The Dow Jones Industrial Average DJIA,
    + 0.64%
    it rose 263 points or 0.8% to 32,423, after oscillating between gains and losses after the opening bell.

  • The S&P 500 SPX,
    + 0.40%
    rose 34 points, or 0.9%, to 4,035.

  • The Nasdaq Composite COMP,
    increased 68 points, or 0.6%, to 11,806.

On Tuesday, the Dow’s industrial sectors fell 0.3% to close at 32,160.74, a fourth consecutive day of losses marking its biggest four-day drop since the October 29 stretch. 2020. The S&P 500 broke a three-day loss streak with a gain of 0.2%, while the Nasdaq Composite advanced 1%.

What drives the markets?

Earnings in the index of the stock index were erased after data showed that April consumer prices rose at an annual rate of 8.3% in April, slowing from a maximum of more 40 years of 8.6% in March. But it was above the 8.1% rate forecast by economists surveyed by The Wall Street Journal and stressed that inflation continues at a torrid pace.

However, the so-called underlying inflation rate, which omits food and energy, rose 0.6% slightly more. Wall Street had forecast a 0.4% increase. The base rate hike over the past year also slowed to 6.2% from a 40-year high of 6.5% in March.

“April CPI data served as a strong reminder that the Fed has a long way to go to reduce inflation. Although price growth showed signs of decline in April, inflation still it was stronger than expected, “Wells Fargo economists wrote in a note.

“Wednesday’s CPI data came as a surprise again and the market now expects the Federal Reserve to raise interest rates by another 190 basis points by the end of 2022,” said Nancy Davis, founder of Quadratic Capital Management and Quadratic Interest portfolio manager. Fund traded on IVOL-type volatility and inflation hedging stock exchange,
to emailed comments.

“Investors need to keep in mind that the Federal Reserve’s aggressive forward-looking direction has already moved interest rate markets and failed to control inflation,” he said.

Opinion: The Fed is not entirely to blame for this rise in inflation

The April federal budget is due at 2 p.m. Eastern time.

Some positive sentiment could also be fueled by reports that COVID cases were shrinking in Beijing and Shanghai, boosting hopes of easing restrictions and pressure on the global economy. The optimism that this could stem from improved demand helped drive up oil prices.

Reads: Ukrainians make gains in the east, as the country stops Russian gas at a center

Separately, the data showed that China’s consumer price index rose 2.1% in April from the previous year, recovering the 1.5% increase in March.

Treasury yields rose after the data, with the 10-year note TMUBMUSD10Y,
up 0.5 basis points to 3%.

The big news about earnings after the markets close will fall on The Walt Disney Co. DIS,
whose shares rose 1% in pre-market trade. Investors will be watching closely the streaming service of the entertainment giant in particular, after rival Netflix NFLX,
reported that last month the number of subscribers fell.

Which companies are in focus?
  • Modern Inc. MRNA,
    on Wednesday he said his chief financial officer had left the company just two days after taking office, following the release of an internal investigation into the financial reports of his former employer. Shares fell 1%.

  • Coinbase Global Inc. COIN,
    shares fell more than 20% as the crypto trading app reported worse-than-expected revenue due to declining volume.

  • Switch Inc. SWCH,
    + 9.74%
    shares rose 8% with the news that DigitalBridge Group Inc. DBRG,
    + 4.67%
    has offered to buy the technology group in a $ 11 billion cash deal.

  • Perrigo PLC PRGO,
    + 6.53%
    shares rose 5%, although the personal care product maker oscillated towards a first-quarter loss, with no estimates.

  • Krispy Kreme Inc. DUT,
    + 6.77%
    equities rose 1.7% after the donor seller reported earnings and revenue exceeding forecasts and confirmed its full-year outlook.

How are other assets traded?
  • Oil futures rose, with US benchmark CL00,
    + 5.85%

    + 5.85%

    + 5.85%
    increase more than 5% a to trade above $ 105 a barrel.

  • GC00 Gold Futures,
    + 0.59%
    rose 0.7% to trade above $ 1,853 an ounce.

  • The Stoxx Europe 600 SXXP,
    + 1.74%
    rose 1.1%, while the FTSE 100 UKX in London,
    + 1.44%
    rose 0.9%.

  • The Shanghai Composite SHCOMP,
    + 0.75%
    rose 0.7% while the Hang Seng HSI Index,
    + 0.97%
    gained 0.9% and the Nikkei 225 NIK in Japan,
    + 0.18%
    increased by 0.1%.

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