Last Updated: 4:00 PM EST
Stock indices did not have a good trading day after today’s inflation report came in hotter than expected. In March, the headline consumer price index (CPI) jumped 3.5% year-over-year and 0.4% month-over-month. For reference, expectations were 3.4% and 0.3%, respectively. As a result, the Nasdaq 100 (NDX), the S&P 500 (SPX), and the Dow Jones Industrial Average (DJIA) fell by 0.87%, 0.95%, and 1.09%, respectively
Things were worse when looking at core CPI, which removes volatile items like food and energy. In fact, core CPI jumped 3.8% year-over-year and 0.4% month-over-month, both above their respective 3.7% and 0.3% forecasts.
These figures are well above the Federal Reserve’s 2% target and suggest that rate cuts will likely be pushed further out. Indeed, Fed officials have been clear that they won’t lower interest rates until there is definitive proof of slowing inflation. However, today’s report does not provide that evidence.
It’s also worth noting that the FOMC’s meeting minutes revealed that some policymakers are not writing off the recent increase in inflation as just a temporary jump. Instead, they pointed out how it was broad-based.
First Published: 5:01 AM EST
U.S. futures opened slightly higher on Wednesday morning as investors looked ahead to the release of the Consumer Price Index (CPI) data for March to gain insight into the Federal Reserve’s interest rate cut trajectory. Futures on the Nasdaq 100 (NDX), S&P 500 (SPX), and the Dow Jones Industrial Average (DJIA) were down by 0.18%, 0.1%, and 0.1%, respectively, at 4:05 a.m. EST, April 10.
Economists expect the core inflation rate, which excludes prices for food and energy, to have risen by 0.3% in March from the previous month. This data is critical for gauging inflationary pressures within the U.S. economy. A lower-than-expected reading could bolster the case for a Fed rate cut as early as June.
Investors are also keenly awaiting the release of the March Federal Open Market Committee (FOMC) meeting minutes, seeking further insight into the Fed’s internal discussions. Moving to corporate earnings, Delta Airlines (DAL) is slated to release its quarterly results today.
In major stock market news, Alphabet (GOOGL) stock gained 1.1% yesterday after it introduced custom-built Axiom Arm chips to make cloud computing more affordable. Also, Intel (INTC) disclosed its artificial intelligence (AI) chip, Gaudi 3, in competition with Nvidia’s (NVDA) H100 graphics processing unit (GPU). Additionally, Microsoft (MSFT) is reportedly planning to invest $2.9 billion in Japan to boost its AI business.
Meanwhile, the U.S. 10-year treasury yield was down at the time of writing, floating near 4.36%. At the same time, WTI crude oil futures trended higher, hovering near $85.59 per barrel as of the last check, as higher U.S. crude stockpiles raised concerns about slower demand.
Elsewhere, European indices are expected to open higher today as investors are looking forward to the release of key U.S. inflation data and Italian retail sales figures for February.
Asia-Pacific Markets Ended Mixed on Wednesday
Asia-Pacific indices ended today’s session on a mixed note as traders evaluated some economic data. The gains were led by Hong Kong stocks, buoyed by a rally in technology and auto stocks. On the other hand, the Japanese market declined as the country’s corporate inflation climbed in March.
Hong Kong’s Hang Seng index gained 1.82%. However, Japan’s Nikkei and Topix indices fell by 0.48% and 0.43%, respectively. Similarly, China’s Shanghai Composite and Shenzhen Component indices closed lower by 0.7% and 1.6%, respectively.
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