Stock Futures Hold Gains Ahead of US Price Data: Markets Wrap

(Bloomberg) — U.S. stocks are poised to maintain the previous session's technology-led gains, as traders bet that Wednesday's headline U.S. inflation report won't undermine the case for an interest rate cut by the Federal Reserve.

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S&P 500 and Nasdaq 100 futures were little changed, while the MSCI All Country World Index extended its longest stretch of advance since January. In the run-up to the US CPI data, the S&P 500 advanced on Tuesday despite Jerome Powell's signals that interest rates will be higher for longer and a mixed reading on producer inflation.

Treasury yields fell and the dollar measure eased ahead of the inflation report, which is expected to show a slight moderation in price increases. The core CPI, which excludes volatile food and energy costs, is expected to slow to 0.3% on the month, from 0.4%.

“The consensus US core CPI reading is discounted and in price, but this may be enough to encourage relief buyers and see the index rise,” said Chris Weston, head of research at Pepperstone Group Ltd. Core CPI reads less than 0.25% m/m, and I certainly don't want to be short.

A 22V Research survey showed that 49% of investors expect the market's reaction to the CPI report to be “risk on” – while only 27% said “risk off”.

“There seems to be an expectation that the data will calm down from last month and the market seems to be somewhat set up that way,” said Samuel Ziff, head of global FX strategy at JPMorgan Chase. “I think we could see a very strong dollar rally if the data is very hot.”

Meanwhile, the renewed frenzy this week around GameStop Corp. and AMC Entertainment Holdings Inc. has calmed. This week's favorites, with stocks of riskier companies that were heavily shorted giving up most of their pre-market gains.

Boeing shares fell after the US Department of Justice found that the plane maker had violated a deferred prosecution agreement linked to two fatal accidents half a decade ago.

The European benchmark index hit a new record on its ninth straight day of gains, its longest winning streak since August 2021. Mining stocks rose alongside copper prices, while industrial commodity stocks and real estate also outperformed.

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In contrast to the likely US path for interest rates, Bank of France Governor François Villeroy de Galhau said the ECB was very likely to start easing policy at its next policy meeting in June.

In commodities, oil traded in a narrow range as the International Energy Agency lowered its 2024 demand growth forecast by 140,000 barrels per day.

Copper futures in New York rose to a record high after a short squeeze that sparked a scramble to shift metals elsewhere to U.S. shores. Gold extended its gains after rising nearly 1% on Tuesday.

Main events this week:

• US CPI, Retail Sales, Business Inventories, Imperial Manufacturing, Wednesday

• Minneapolis Federal Reserve Bank President Neel Kashkari speaks on Wednesday

• Japanese GDP, Industrial Production, Thursday

• US Housing Start, Initial Jobless Claims, Industrial Production, Thursday

• Philadelphia Federal Reserve Bank President Patrick Harker speaks Thursday

• Cleveland Fed President Loretta Mester speaks Thursday

• Atlanta Fed President Rafael Bostic speaks Thursday

• China real estate prices, retail sales, industrial production, Friday

• Eurozone consumer price index, Friday

• United States Conference. Leading Council Index, Friday

Some key movements in the markets:

Stores

• S&P 500 futures were little changed as of 6:33 a.m. New York time

• Nasdaq 100 futures were little changed

• Dow Jones Industrial Average futures were little changed

• The Stoxx Europe 600 index rose 0.3%.

• MSCI World Index rose 0.1%

Currencies

• The Bloomberg Dollar Spot Index fell 0.1%.

• There was little change in the euro at $1.0827

• The British pound rose 0.2 percent to $1.2615

• The Japanese yen rose 0.4 percent to 155.84 yen to the dollar

Digital currencies

• Bitcoin rose 2.2% to $62,954.55

• Ethereum rose 1% to $2,921.06

Bonds

• The yield on the 10-year Treasury note fell 2 basis points to 4.42%.

• The yield on German 10-year bonds fell seven basis points to 2.47%.

• The yield on British 10-year bonds fell by 6 basis points to 4.11%.

Goods

• West Texas Intermediate crude rose 0.1% to $78.11 a barrel

• Spot gold rose 0.5 percent to $2,370.59 per ounce

This story was produced with assistance from Bloomberg Automation.

-With assistance from Winnie Hsu and Naomi Tagitsu.

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