Last Updated:9:30 AM EST
Inflation remained red hot in April, yet stocks opened higher on Friday amid optimism about a debt ceiling deal.
Nasdaq 100 (ndx), S&P 500 (spx), and the Dow Jones Industrial Average (DJIA) were up 0.4%, 0.3% and 0.4%, respectively, as of 9:30 a.m. EST May 26.
Last Updated: 8:30AM EST
The Fed’s preferred inflation gauge, the personal consumption expenditure index, was up 0.4% in anticipation of the April meeting and rose 4.7% year-over-year. The year-on-year increase was 0.1 percent higher than expected. Headline inflation also rose 0.4% and rose to 4.4% from a year earlier, up from the 4.2% rate in March.
As inflation refuses to calm down, investors expect the Fed to continue raising interest rates in June to a range of 5% to 5.25%. The probability of a 25-basis-point rate hike rose to 62.0% from 51.7% on Thursday, according to the CME Fedwatch tool.
Meanwhile, orders for manufactured goods rose a faster 1.1% in April, compared with a 0.8% decline in forecasts and a 3.3% increase in March, indicating two consecutive months of growth. The increase was largely driven by the military but reassuringly, business investment also grew by 1.4% in April. Generally, companies invest more when they expect the economy to improve, but it remains to be seen whether this increase is just a blip or the start of a new trend.
Core durable goods excluding transportation declined 0.2% in April, while economists were expecting it to remain flat and rise 0.3% in the previous month.
The trade deficit in goods widened 17% in April to a six-month high of $96.8 billion. Imports improved while exports registered a sharp decline.
futures on the Nasdaq 100 (ndx), S&P 500 (spx), and the Dow Jones Industrial Average (DJIA) were up 0.3%, 0.13%, and 0.10%, respectively, at 8:30 a.m. EST on May 26.
First Published: 5:31 AM EST
US futures remain volatile on Friday morning, as markets eagerly await progress on US debt ceiling talks ahead of the weekend. futures on the Nasdaq 100 (ndx), S&P 500 (spx), and the Dow Jones Industrial Average (DJIA) are down 0.12%, 0.18%, and 0.10%, respectively, as of May 26 at 4:00 AM EST.
Both the Dow and the S&P 500 are on track to end the week in the negative, while the Nasdaq 100 is likely to close with modest gains. Reports say the House and the Capitol are close to a two-year deal to limit government spending, ahead of a June 1 deadline. Additionally, Fitch’s negative watch on the US credit rating remains high until the deal is finalized.
Meanwhile, chipmaker Nvidia (Nasdaq: NVDA) continued to rise in yesterday’s trading session, hitting another all-time high and approaching a trillion-dollar capitalization. Nvidia’s rally pushed major semiconductor and AI stocks higher yesterday. In addition, the gap in the stocks of retailers (NYSE: GPS), Costco Wholesale (Nasdaq: Cost), and Best Buy (NYSE: BBY) pounced on solid quarterly results. Additionally, semiconductor player Marvell Technology (Nasdaq: MRVL) jumped 17% in extended trading on a strong earnings beat and a solid AI-driven outlook.
On the economic front, the Personal Consumption Expenditure (PCE) index, considered a suitable inflation gauge, is due for release today. Expectations are pegged at 4.6% year-on-year growth in April. Data on PCE as well as personal income, consumer spending and sentiment and durable goods will be released today.
European indices traded mixed today on anticipation of progress on US debt limit talks. Shares of Dutch chip maker ASML Holdings are also rising.DE: ASME) Today.
Asia-Pacific markets closed in the green
Asia-Pacific indices ended the trading session in the red today, following uncertainty over US debt ceiling talks. Hong Kong’s Hang Seng index remained closed for trading today.
Elsewhere, China’s Shanghai Composite and Shenzhen Component Indices ended the trading session up 0.37% and 0.12%, respectively.
At the same time, Japan’s Nikkei closed with a gain of 0.37%, while the trading day of the Topix index closed with a slight decline. Specifically, Tokyo’s consumer price inflation (CPI) number rose 3.2% in May, while the post-core inflation figure rose sharply to 3.9%.
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