NEW YORK: US stocks futures rallied early Tuesday after consumer price data showed inflation was still high, but moderating.
“Equity markets are likely to breathe a collective sigh of relief with easing year-on-year consumer inflation today,” said Jason Schenker, president of Prestige Economics, while adding that “inflation remains very high.”
Analysts said the data will keep the Federal Reserve on its current path of raising interest rates. However, the US central bank on Wednesday is expected to hike rates by 0.50 percentage points, smaller than the last four 0.75-point increases.
Ahead of the stock market open, futures for the S&P 500 were up about 2.8 percent at 4,103.75.
Both Dow and Nasdaq futures were also solidly higher.
Wall St rises as focus turns to inflation data, Fed
The consumer price index (CPI), a closely-watched measure of inflation, jumped 7.1 percent from a year ago in November, down from 7.7 percent in October, according to Labor Department figures.
That was the smallest year-on-year increase over the past 12 months.
But the overall number is still about three times the pre-pandemic pace.
The data also pushed the dollar lower against the euro and other currencies, with traders betting that the Fed will pull back from its current posture more quickly as inflation eases.
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