Customers select goods at a supermarket in Foster City, California, the United States, May 15, 2024. According to the Labor Department's Bureau of Labor Statistics, the U.S. consumer price index (CPI) rose by 0.3 percent from March. (Photo by Li Jianguo/Xinhua)
NEW YORK, May 15 (Xinhua) -- U.S. stock indexes set new record highs on Wednesday, after the U.S. consumer price index (CPI) showed that inflation eased slightly in April.
The Dow Jones Industrial Average rose 349.89 points, or 0.88 percent, to 39,908.0. The S&P 500 added 61.47 points, or 1.17 percent, breaking above 5,300 for the first time to 5,308.15. The Nasdaq Composite Index increased by 231.21 points, or 1.40 percent, to 16,742.39, hitting a record high.
Ten of the 11 primary S&P 500 sectors ended in green, with technology and real estate leading the gainers by going up 2.29 percent and 1.69 percent, respectively. Meanwhile, consumer discretionary was little changed.
According to the Labor Department's Bureau of Labor Statistics, the CPI rose by 0.3 percent from March. This figure was slightly below the expected 0.4 percent as estimated by Dow Jones. Over a 12-month period, the CPI increased by 3.4 percent, aligning with market expectations.
Excluding volatile food and energy prices, the core inflation rate, a key indicator, also rose by 0.3 percent monthly and 3.6 percent annually, in line with forecasts. This marks the core 12-month inflation rate as the lowest since April 2021, with the monthly increase being the smallest since December.
"The lack of a nasty surprise this time around is welcomed," Bankrate senior economic analyst Mark Hamrick wrote in reaction to the print. Still, Hamrick added, "with the 3.4 percent year-over-year headline increase and 3.6 percent in the core (excluding food and energy), these remain irritatingly high. The status of the battle against inflation requires that interest rates remain elevated in the near-term."
Yields on the benchmark U.S. 10-year Treasury and 2-year Treasury dipped following the morning's reports. The yield on the 10-year Treasury fell 9.8 basis points to 4.344 percent, while the 2-year Treasury yield was last at 4.738 percent after sliding by 7.9 basis points.
U.S. retail sales in April remained stagnant, as reported by the Commerce Department, adding to worries about consumer conditions amid persistent inflation and rising interest rates. This data reflects a deceleration from the 0.6 percent month-on-month growth in March. Economists, as per Bloomberg data, had anticipated a 0.4 percent rise in spending.
"The fact that retail sales stalled in April is not necessarily a sign the consumer is spent; but for once at least it does not show continued evidence of an unstoppable consumer," Wells Fargo senior economist Tim Quinlan wrote Wednesday.
Both reports released on Wednesday have heightened expectations for Fed rate cuts in the coming months. Data from Fed funds futures trading indicates a 75.6 percent probability that the U.S. central bank will lower rates at its September meeting, as per the CME FedWatch Tool.
This represents an increase from Tuesday's estimation of a 65.1 percent chance of a rate cut in September.
"The report is a positive (one) after the string of upside surprises to start the year. However, one report is unlikely to inspire a significant amount of confidence for the Fed," said a note by Bank of America Global Research.
Inflation data will have to slow much more or the labor market data needs to weaken to really bring a September cut into play, according to Bank of America Global Research, which retained its forecast of Fed's first rate cut in December 2024. ■
A customer selects goods at a supermarket in Foster City, California, the United States, May 15, 2024. According to the Labor Department's Bureau of Labor Statistics, the U.S. consumer price index (CPI) rose by 0.3 percent from March. (Photo by Li Jianguo/Xinhua)
Customers select goods at a supermarket in Foster City, California, the United States, May 15, 2024. According to the Labor Department's Bureau of Labor Statistics, the U.S. consumer price index (CPI) rose by 0.3 percent from March. (Photo by Li Jianguo/Xinhua)
A customer selects goods at a supermarket in Foster City, California, the United States, May 15, 2024. According to the Labor Department's Bureau of Labor Statistics, the U.S. consumer price index (CPI) rose by 0.3 percent from March. (Photo by Li Jianguo/Xinhua)
