U.S. Stocks May See Initial Strength Following Inflation Data
After ending the previous session mostly lower, stocks are likely to move back to the upside in early trading on Thursday. The major index futures are currently pointing to a higher open for the markets, with the S&P 500 futures up by 0.7 percent.
The upward momentum on Wall Street comes following the release of the Labor Department’s highly anticipated report on consumer price inflation in the month of July.
The report said the annual rate of growth by consumer prices accelerated to 3.2 percent in July from 3.0 percent in June. Economists had expected the pace of price growth to accelerate to 3.3 percent.
The Labor Department also said its consumer price index rose by 0.2 percent on a monthly basis in July, matching the uptick seen in June as well as expectations.
Excluding food and energy prices, core consumer prices also rose by 0.2 percent for the second straight month in July, in line with estimates.
Meanwhile, the annual rate of growth by core consumer prices slowed to 4.7 percent in July from 4.8 percent in June. The rate of growth was expected to be unchanged.
The slower than expected annual rate of growth is likely to reinforce expectations the Federal Reserve will leave interest rates unchanged next month.
Potentially adding to optimism about the outlook for rates, a separate Labor Department report showed first-time claims for U.S. unemployment benefits rose by much more than expected in the week ended August 5th.
The report said initial jobless claims climbed to 248,000, an increase of 21,000 from the previous week’s unrevised level of 227,000. Economists had expected jobless claims to inch up to 230,000.
Stocks fluctuated over the course of the trading session on Wednesday before ending the day mostly lower. The major averages all moved to the downside, with the Nasdaq and the S&P 500 falling to their lowest closing levels in a month.
The major averages came under pressure going into the close, finishing the session firmly in the red. The tech-heavy Nasdaq slumped 162.31 points or 1.2 percent to 13,722.02, the S&P 500 slid 31.67 points or 0.7 percent to 4,467.71 and the Dow fell 191.13 points or 0.5 percent at 35,123.36.
In overseas trading, stock markets across the Asia-Pacific region moved mostly higher during trading on Thursday. Japan’s Nikkei 225 Index advanced by 0.8 percent, while China’s Shanghai Composite Index rose by 0.3 percent.
The major European markets have also moved to the upside on the day. While the French CAC 40 Index has jumped by 1.1 percent, the German DAX Index is up by 0.5 percent and the U.K.’s FTSE 100 Index is up by 0.1 percent.
In commodities trading, crude oil futures are slipping $0.29 to $84.11 a barrel after surging $1.48 to $84.40 a barrel on Wednesday. Meanwhile, after falling $9.30 to $1,950.60 an ounce in the previous session, gold futures are climbing $10.70 to $1,961.30 an ounce.
On the currency front, the U.S. dollar is trading at 143.91 yen versus the 143.73 yen it fetched at the close of New York trading on Wednesday. Against the euro, the dollar is valued at $1.1018 compared to yesterday’s $1.0974.
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