Positive Reaction To CPI Data May Lead To Rebound On Wall Street
12 Março 2024 - 10:08AM
IH Market News
The major U.S. index futures are currently pointing to a higher
open on Tuesday, with stocks likely to regain ground following the
pullback seen over the two previous sessions.
The futures advanced following the release of the Labor
Department’s highly anticipated report on consumer price inflation
in the month of February.
The Labor Department said its consumer price index climbed by
0.4 percent in February after rising by 0.3 percent in January. The
increase matched economist estimates.
Excluding food and energy prices, core consumer prices also rose
by 0.4 percent in February, matching the increase seen in January.
Economists had expected core prices to rise by 0.3 percent.
The report also said the annual rate of consumer price growth
ticked up to 3.2 percent in February from 3.1 percent in January.
The year-over-year growth was expected to be unchanged.
Meanwhile, the annual rate of core consumer price growth slowed
to 3.8 percent in February from 3.9 percent in January. Economists
had expected the pace of growth to decelerate to 3.7 percent.
While core price growth slowed by slightly less than expected,
the slowdown may still add to optimism about the outlook for
interest rates.
Treasury yields saw considerable volatility immediately
following the release of the report but have moved modestly lower
since then.
After coming under pressure over the course of last Friday’s
session, stocks saw further downside in early trading on Monday.
The major averages regained ground as the day progressed, however,
with the Dow closing modestly higher.
While the Dow inched up 46.97 points or 0.1 percent to 38,769.66
after falling nearly 240 points in early trading, the S&P 500
edged down 5.75 points or 0.1 percent to 5,117.94 and the Nasdaq
fell 65.84 points or 0.4 percent to 16,019.27.
The early weakness on Wall Street came amid uncertainty about
the outlook for interest rates ahead of the release of key economic
data.
On Thursday, the Labor Department is due to release a separate
report on producer price inflation in the month of February.
Producer prices are expected to rise by 0.3 percent in February,
matching the increase seen in January, while the annual rate of
producer price growth is expected to accelerate to 1.1 percent from
0.9 percent.
Reports on retail sales, industrial production and consumer
sentiment are also likely to attract attention in the coming
days.
Despite the recovery attempt by the broader markets,
semiconductor stocks still saw significant weakness on the day,
with the Philadelphia Semiconductor Index falling by 1.4
percent.
Within the sector, semiconductor equipment maker Applied
Materials (NASDAQ:AMAT) slumped by 2.0 percent despite raising its
quarterly cash dividend from $0.32 to $0.40 per share.
Notable weakness also remained visible among steel stocks, as
reflected by the 1.2 percent loss posted by the NYSE Arca Steel
Index.
On the other hand, gold stocks showed a strong move to the
upside on the day, driving the NYSE Arca Gold Bugs Index up by 2.5
percent.
The rally by gold stocks came amid a modest increase by the
price of the precious metal, with gold for April delivery inching
up $3.10 to $2,188.60 an ounce.
Applied Materials (NASDAQ:AMAT)
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