Economy

S&P 500 and Nasdaq futures rose after the CPI surprise

March 12, 2024
Izer

US stock futures added to gains on Tuesday after headline inflation data came in hotter than expected to help shape expectations about the timing of a Federal Reserve interest rate cut.

S&P 500 (^GSPC) futures rose 0.5%, while technology-heavy Nasdaq 100 (^NDX) futures rose nearly 0.8% after two days of losses. Dow Jones Industrial Average (^DJI) futures rose 0.2%.

Investors are digesting the release of the Consumer Price Index, one of the most important data inputs for the Fed in deciding its next policy move. Headline inflation met expectations with a monthly increase of 0.4% in February, after a 0.3% rise in the previous month. But the “core” CPI – which excludes food and energy prices – rose 0.4% month-on-month and 3.1% year-on-year, both above estimates.

The CPI reading is seen as influential, given that Fed policymakers have said they want to make sure inflation is declining before they start cutting interest rates from their historically high level. Prior to the CPI release, S&P 500 traders were hedging moves of 0.9% in either direction for stocks.

Meanwhile, Bitcoin (BTC-USD) continued its record high, rising to $72,120. Surging inflows into crypto assets have helped the leading coin gain nearly 70% this year so far, prompting bulls to predict that Bitcoin could reach $350,000 this year.

On the corporate front, shares of Oracle (ORCL) jumped 12% in pre-market trading amid signs that the database giant is making progress in cloud computing amid a partnership with artificial intelligence chip giant Nvidia (NVDA).

He lives2 updates

  • Inflation remains high

    Inflationary pressures remained persistent in February as shelter and gas prices rose, according to a European Central Bank report Latest data Released by the Bureau of Labor Statistics Tuesday morning.

    The Consumer Price Index (CPI) rose 0.4% month-over-month and 3.2% year-over-year in February, slightly higher than the 0.3% monthly increase in January and the 3.1% annual gain.

    Both metrics roughly match economists' expectations for a 0.4% month-over-month increase and a 3.1% annual increase, according to data from Bloomberg.

    On a “core” basis, which excludes the more volatile costs of food and gas, prices in February rose 0.4% from the previous month and 3.8% from a year ago. Both measures were higher than economists' expectations for a 0.3% monthly increase and 3.7% annual gain.

    Read more here.

  • 3 reasons behind the decline in Apple shares

    Apple (AAPL) stock has been looking less pretty in the past month.

    Shares of the tech monster fell 8.5%, lagging the S&P 500's 1.8% advance. Critics pointed to disappointment that Apple has not yet revealed its artificial intelligence plans as the main reason for the stock's weakness. Concern about the pace of Chinese demand did not help sentiment either.

    But there may be more at play here, notes Amit Daryanani, technology analyst at EvercoreISI, in a new note to clients this morning.

    Daryanani shares three reasons behind Apple's sell-off:

    “We've answered a slew of investor questions about what could unlock the stock's upside and help push momentum back. Overall, we think there's Three things This is what has led to the “underperformance” of AAPL over the past few weeks – 1) Turn on risk + skew to Nvidia/AI: I hear this a lot from investors who want to overweight “AI” names like Nvidia (NVDA) especially in terms of large cap, making them more comfortable taking dollars away from AAPL. 2) China's concerns – There are still sets of data indicating that Chinese demand is broadly weak and in the smartphone sector, Apple may be ceding some share and 3) Regulatory concerns – This continues to hamper comfort around Apple. It is worth noting that we have heard concerns about the implications for the Department of Justice and Google as well as antitrust issues in the European Union.”

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