U.S. Stocks May See Initial Strength On Inflation Data, U.S.-China Deal

Stocks are likely to move to the upside in early trading on Wednesday, adding to the gains posted in the previous session. The major index futures are currently pointing to a higher open for the markets, with the S&P 500 futures up by 0.4 percent.

The futures advanced following the release of a closely watched Labor Department report showing U.S. consumer prices increased by slightly less than expected in the month of May.

The Labor Department said its consumer price index inched up by 0.1 percent in May after rising by 0.2 percent in April. Economists had expected another 0.2 percent increase.

Meanwhile, the report said the annual rate of consumer price growth accelerated to 2.4 percent in May from 2.3 percent in April. The annual rate of consumer price growth was expected to speed up to 2.5 percent.

Excluding food and energy prices, core consumer prices still crept up by 0.1 percent in May after edging up by 0.2 percent in April. Economists had expected core consumer prices to rise by another 0.2 percent.

The annual rate of core consumer price growth in May was unchanged from the previous month at 2.8 percent, while economists had expected the annual rate of core consumer price growth to accelerate to 2.9 percent.

The upward momentum on Wall Street also comes after U.S. and Chinese officials announced an agreement in principle on a framework to ease trade disputes between the two economic superpowers.

The plan is subject to approval by President Donald Trump and his Chinese counterpart Xi Jinping, Commerce Secretary Howard Lutnick told reporters.

Without specifying the terms of the framework, Lutnick indicated that both sides agreed to lift export controls on key goods and technologies.

In a subsequent post on Truth Social, Trump said the deal calls on China to supply full magnets and “any necessary rare earths” up front.

“WE ARE GETTING A TOTAL OF 55% TARIFFS, CHINA IS GETTING 10%,” Trump added. “RELATIONSHIP IS EXCELLENT!”

U.S. stocks moved modestly to the upside on Tuesday as traders await the outcome of the ongoing trade talks between China and the U.S. in London.

The Dow climbed 105.11 points or 0.3 percent to finish at 42,866.87, while the Nasdaq gained 123.75 points or 0.6 percent to close at 19,714.99 and the S&P 500 added 32.93 points or 0.6 percent to end at 6,038.81.

In overseas trading, stock markets across the Asia-Pacific region moved mostly higher during trading on Wednesday. Japan’s Nikkei 225 Index climbed by 0.6 percent, while Hong Kong’s Hang Seng Index advanced by 0.8 percent.

The major European markets have also moved to the upside on the day. While the German DAX Index is up by 0.5 percent, the U.K.’s FTSE 100 Index is up by 0.3 percent and the French CAC 40 Index is up by 0.1 percent.

In commodities trading, crude oil futures are jumping $1.09 to $66.07 a barrel after falling $0.31 to $64.98 a barrel on Tuesday. Meanwhile, an ounce of gold is trading at $3,381.30, up $37.90 compared to the previous session’s close of $3,343.40. On Tuesday, gold fell $11.50.

On the currency front, the U.S. dollar is trading at 144.51 yen compared to the 144.87 yen it fetched at the close of New York trading on Tuesday. Against the euro, the dollar is trading at $1.1470 compared to yesterday’s $1.1425.

Business News