U.S. Stocks Likely To Surge Following Tamer Than Expected Consumer Price Data

After ending the previous session narrowly mixed, stocks are likely to show a strong move to the upside in early trading on Tuesday. The major index futures are currently pointing to a sharply higher open for the markets, with the S&P 500 futures up by 1.1 percent.

The futures surged following the release of the Labor Department’s highly anticipated report on consumer price inflation in the month of October.

The Labor Department said its consumer price index was unchanged in October after climbing by 0.4 percent in September. Economists had expected consumer prices to inch up by 0.1 percent.

Excluding food and energy prices, core consumer prices edged up by 0.2 percent in October after rising by 0.3 percent in September. Core prices were expected to rise by another 0.3 percent.

The report also said the annual rate of consumer price growth slowed to 3.2 percent in October from 3.7 percent in September. Economists had expected the pace of growth to decelerate to 3.3 percent.

Core consumer prices were up by 4.0 percent compared to the same month a year ago, reflecting the smallest year-over-year increase since September 2021.

The annual rate of core consumer price growth was expected to come in unchanged from 4.1 percent in the previous month.

The tamer than expected inflation is likely to add to optimism that the Federal Reserve will refrain from future interest rates hikes.

Treasury yields have moved sharply lower following the release of the report, potentially adding to the buying interest on Wall Street.

After recovering from an early move to the downside, stocks turned in a lackluster performance throughout much of the trading session on Monday. The major averages spent most of the afternoon lingering near the unchanged line.

The major averages eventually ended the day narrowly mixed. While the Dow inched up 54.77 points or 0.2 percent to 34,337.87, the Nasdaq dipped 30.36 points or 0.2 percent to 13,767.74 and the S&P 500 edged down 3.69 points or 0.1 percent to 4,411.55.

In overseas trading, stock markets across the Asia-Pacific region moved mostly higher during trading on Thursday. Japan’s Nikkei 225 Index and China’s Shanghai Composite Index rose by 0.3 percent, while South Korea’s Kospi jumped by 1.2 percent.

The major European markets have also moved to the upside on the day. While the German DAX Index has surged by 1.3 percent, the French CAC 40 Index is up by 0.9 percent and the U.K.’s FTSE 100 Index is up by 0.2 percent.

In commodities trading, crude oil futures are rising $0.34 to $78.60 a barrel after jumping $1.09 to $78.26 a barrel on Monday. Meanwhile, after advancing $12.50 to $1,950.20 an ounce in the previous session, gold futures are climbed $7.70 to $1,957.90 an ounce.

On the currency front, the U.S. dollar is trading at 150.85 yen compared to the 151.72 yen it fetched at the close of New York trading on Monday. Against the euro, the dollar is valued at $1.0797 compared to yesterday’s $1.0698.

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