Last Updated: 4:05 PM EST
Stock indices finished today’s trading session in the green. The Nasdaq 100 (NDX), S&P 500 (SPX), and the Dow Jones Industrial Average (DJIA) gained 1.49%, 1.12%, and 0.61%, respectively. Goldman Sachs weighed in on today’s inflation report, remaining optimistic despite core inflation coming in slightly above expectations. It argues that strong U.S. growth and declining global inflation will continue to lift risk assets.
According to Goldman, core inflation is anticipated to decrease, maintaining a favorable economic environment. However, they caution that persistently high inflation could deter central banks from lowering interest rates, posing a risk to the anticipated soft landing narrative.
Conversely, JPMorgan signals caution, suggesting that the market’s recent rally, fueled by investor momentum, could face a correction. Strategist Marko Kolanovic highlights the overcrowded trades in tech giants and companies benefiting from AI advancements. Once the AI enthusiasm wanes, the unwinding of these bets could have a notable impact on the market.
Last Updated: 11:15 AM EST
U.S. indices are resuming their rallies today after this morning’s CPI report. Inflation in the U.S. ticked up slightly more than expected in February, increasing 3.2% year-over-year compared to the forecasted 3.1%.
This is the second consecutive month that inflation has surpassed expectations, suggesting the Federal Reserve might remain cautious about reducing interest rates. Nevertheless, according to the CME FedWatch Tool, investors are pricing in a 61.6% chance that the Fed will start cutting rates by 25 basis points in June.
The report’s details revealed that core inflation, which excludes volatile food and energy costs, rose by 0.4% month-over-month, slightly higher than anticipated, and 3.8% year-over-year. This development somewhat lowers the hope of a swift decline in inflation, especially as service prices continue to rise.
On the other hand, the recent jobs report suggests a cooling in wage growth, offering some reassurance against wage-driven inflation.
First Published: 5:02 AM EST
U.S. futures traded higher on Tuesday morning as investors awaited a crucial inflation report today. This report could provide insight into the Federal Reserve’s interest rate trajectory. Futures on the Nasdaq 100 (NDX), S&P 500 (SPX), and the Dow Jones Industrial Average (DJIA) were up about 0.58%, 0.36%, and 0.1%, respectively, at 4:19 a.m. EST, March 12.
The Consumer Price Index (CPI) data for February is due for release at 8:30 a.m. EST today. Economists expect the core inflation rate, which excludes prices for food and energy, to have fallen to 3.7% in February from 3.9% in January 2024.
This key report sheds light on price trends in the economy and holds significance for the Federal Reserve’s monetary policy decisions. A decline in inflation as expected could support the Fed’s decision to cut rates as soon as June. According to the CME Group’s Fedwatch Tool, the probability of the first-rate cut occurring in June is currently about 60%.
Moving to corporate earnings, Archer Daniels Midland (ADM), Kohl’s (KSS), and Manchester United (MANU) are slated to release results today.
Meanwhile, the U.S. 10-year treasury yield was down at the time of writing, floating near 4.09%. At the same time, the WTI crude oil futures trended higher, hovering near $78.23 per barrel as of the last check, as traders awaited OPEC’s monthly report and data about U.S. oil inventory.
Elsewhere, European indices are expected to open higher today as investors are focused on the U.S. inflation data, which could influence the interest rate decisions of major central banks.
Asia-Pacific Markets Ended Mixed on Tuesday
Asia-Pacific indices ended today’s session on a mixed note. The gains were led by Hong Kong stocks, buoyed by a rally in technology stocks. On the other hand, Japanese markets ended lower following reports of higher-than-expected growth in producer prices last month.
Hong Kong’s Hang Seng index closed higher by 3.05%. Meanwhile, China’s Shanghai Composite Index ended lower by 0.41%, and the Shenzhen Component Index was up by 0.51%. At the same time, Japan’s Nikkei and Topix indices finished lower by 0.06% and 0.36%, respectively.
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