Stocks today: US futures jump as inflation shows signs of easing

US stocks were steady on Wednesday, hitting new record highs as a soft consumer price reading fueled hopes that the Federal Reserve may cut interest rates sooner than expected.

Futures on the Dow Jones Industrial Average (YM=F) rose about 0.4%, while those on the S&P 500 (ES=F) were 0.5% higher. Contracts for the Nasdaq 100 (NQ=F) rose 0.4% at the end of a new high for technology stocks.

As Yahoo Finance’s Allie Canal reported, the Consumer Price Index rose 0.3% last month and 3.4% from a year earlier in April, a slowdown from March. “Core” inflation, which strips out the cost of food and gas, rose at its slowest annual pace in 2024.

Stocks edged higher amid rekindled confidence that the U.S. economy is in good enough shape for the Federal Reserve to begin cutting interest rates from their current historic levels. That optimism has fueled a resurgence of bullishness in the market.

Elsewhere on the macroeconomic front, retail sales were flat last month, falling well short of Wall Street expectations. The report could raise new questions about the health of American consumers.

Read more: How does the labor market affect inflation?

Meanwhile, the pace slowed on the frenzied rally in meme stocks that saw the prices of GameStop ( GME ) and AMC ( AMC ) more than double at one point on Tuesday. Both stocks fell more than 10% in premarket trading.

LIvINg3 updates

  • Retail sales fell in April, falling short of Wall Street expectations

    The US consumer showed signs of slowing in April.

    Retail sales were flat during the month, according to data from the Commerce Department, adding to concerns about the consumer’s health amid steady inflation and higher interest rates.

    This marked a slowdown from the 0.6% month-on-month growth in March. Economists had expected a 0.4% increase in spending, according to Bloomberg data.

    Excluding cars and gas, retail sales fell 0.1% last month; expectations were for an increase of 0.1%.

  • Inflationary pressures eased in April

    U.S. consumer price gains cooled during April, according to the latest data from the Bureau of Labor Statistics released Wednesday morning.

    The Consumer Price Index (CPI) rose 0.3% over the previous month and 3.4% from a year earlier in April, a slight slowdown from March’s 3.5% annual price gain and the 0.4% month-on-month increase month.

    April’s monthly growth came in lower than economists’ forecasts for an increase of 0.4%. The annual price increase matched estimates, according to data from Bloomberg.

    On a “core” basis, which strips out more volatile food and gas costs, prices in April rose 0.3% from the previous month and 3.6% over the past year, cooler than March’s data. Both measures met economists’ expectations.

  • Well, at least the ratings aren’t too long

    As we witness GameStop ( GME ) rise another 8% pre-market, it’s worth noting that wild bubble moves like this aren’t spreading across the broader market.

    This can be captured in this great new valuation chart from Goldman Sachs this morning.

    Compelling reviews yet out there?Compelling reviews yet out there?

    Compelling reviews yet out there? (Goldman Sachs)

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