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US futures stuck in inflation countdown as meme rally roars back
Meme shares soared again on Tuesday as U.S. stocks generally remained muted amid a mixed inflation reading. Investors were also awaiting a speech from Jerome Powell that could shed light on the path of interest rates.
Dow Jones Industrial Average Futures (YM=F) changed little after the blue-chip benchmark broke an eight-day winning streak on Monday in lackluster negotiations. Futures on the S&P 500 (ES=F) also fluctuated along the flat line, while futures tied to the tech-heavy Nasdaq 100 (QN=F) fell by around 0.2%.
Futures moved on either side of the flat line after a mixed wholesale price reading on Tuesday morning. Wholesale prices rose 0.5% month-on-month in April, above the consensus expectation of 0.3%, according to the latest release of the Producer Price Index, which measures the prices producers receive for goods produced . Additionally, in the release, the March monthly price increase was revised downwards to a 0.1% reduction from an initial reading of a 0.2% increase.
Still, a more crucial inflation reading is expected on Wednesday, with the release of the Consumer Price Index.
GameStop (GME) and AMC (AMC) shares soared in premarket trading, each up more than 120%, as retail investors piled in for a second day. A rally from the meme darlings dominated Monday’s session, with both scoring over 70% in earnings as the return of an influential social media star kicked off a new craze for meme stocks.
More generally, stocks have paused their recent rally as investors wait to find out whether inflation has eased and started to fall, setting the stage for interest rate cuts. A chorus of Federal Reserve officials sent a clear message that they will not lower rates until they are confident of a slowdown.
Investors will be listening closely to Fed Chairman Powell’s comments on Tuesday morning for any hints about progress on the inflation mission and how the U.S. economy is holding up.
See more information: How does the job market affect inflation?
On the corporate front, Alibaba (NANNY) shares fell about 5% in the wake of the fourth-quarter earnings report. The Chinese e-commerce giant posted a Drop of 86% worse than expected in profit, but beat Wall Street estimates in terms of revenue.
Live update1
- Tuesday, May 14, 2024 at 2:47 pm GMT+2
Wholesale prices rose more than expected in April
Wholesale prices rose more than expected in April, raising concerns that inflation could be stickier than initially expected and causing futures linked to major US stock indexes to fall.
Wholesale prices rose 0.5% month-on-month in April, above the consensus expectation of 0.3%, according to the latest release of the Producer Price Index, which measures the prices producers receive for goods produced .
The “core” PPI, which excludes volatile food and energy categories, also rose 0.5%, above estimates for a 0.2% increase. Additionally, in the release, the March monthly price increase was revised downwards to a 0.1% reduction from an initial reading of a 0.2% increase.
Futures tied to the three major averages fell following the news. Dow Jones Industrial Average Futures (YM=F) were just around 0.1% after the blue-chip benchmark broke an eight-day winning streak on Monday in lackluster negotiations. Futures on the S&P 500 (ES=F) fell 0.2%, while those tied to the tech-heavy Nasdaq 100 (QN=F) fell by around 0.3%.
Meanwhile, the 10-year Treasury yield (^ TNX) rose about 5 basis points to 4.53%.