Wall Street futures higher as data shows inflation easing
Futures on Wall Street edged higher Tuesday and bond yields slipped following new government data showing that the hottest inflation in decades continues to ease.
Prices at the wholesale level rose 8% in October from 12 months earlier, the fourth straight decline, the U.S. reported. The report follows last week's data showing that consumer prices eased more than economists expected in October and that propelled markets to their best week since summer.
The latest data gave stock futures a push higher. Futures for the benchmark S&P 500 rose 2% and the Dow Jones industrials climbed 1.2%.
“Equity markets are looking slightly positive,” said Craig Erlam of Oanda in a report. The rally of the past few weeks is “perhaps slowing a little,” he said, but “there doesn’t appear to be much appetite at this stage to bail on it.”
Wall Street is closely watching inflation data that could impact how much the Federal Reserve raises interest rates at its December meeting. Producer price data is not typically a market mover, but with an intense focus on any information that might suggest what the Fed will do next, Tuesday's report sent U.S. futures to session highs.
The yield on the two-year Treasury, which follows action from the Fed, fell to 4.32% from 4.37% just before the latest inflation data was released. The 10-year Treasury, which influences mortgage rates, fell to 3.79% from 3.83% just before the report's release.
Investors worry this year’s repeated interest rate increases by central banks to cool inflation that is near multi-decade highs might tip the global economy into recession.
Traders expected the Fed to raise its benchmark lending rate again at its December but by a smaller margin of one-half percentage point after four hikes of 0.75 percentage points. Fed officials...