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S&P 500, Nasdaq futures rise after CPI surprise

March 12, 2024
Arzu

U.S. stock futures added to gains on Tuesday after key inflation data came in hotter than expected to help set expectations for a Federal Reserve interest rate cut.

S&P 500 (^GSPC) futures rose 0.5%, while those in the tech-heavy Nasdaq 100 (^NDX) were roughly 0.8% higher 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 in determining the central bank's next policy move. Inflation was expected with a monthly gain of 0.4% in February, following an increase of 0.3% in February. But “core” CPI – which strips out food and energy prices – rose 0.4% on the month and gained 3.1% on the year, beating estimates.

The CPI print is seen as influential, with central bank policymakers saying they want to ensure inflation eases before they start cutting rates from their historically high levels. Ahead of the CPI release, S&P 500 traders led a 0.9% move in either direction for stocks.

Meanwhile, bitcoin (BTC-USD) rose to $72,120 and continued its record rally. Booming inflows into crypto assets have helped the leading token post nearly 70% gains so far this year, prompting bulls to predict that bitcoin could soar to $350,000 this year.

On the corporate front, shares of Oracle ( ORCL ) rose 12% in premarket trading, amid a tie-up with AI chip maker Nvidia ( NVDA ) and the database giant's progress in cloud computing.

live2 updates

  • Inflation keeps rising

    Inflationary pressures continued in February as accommodation and gas prices rose Latest data From the Bureau of Labor Statistics released Tuesday morning.

    The Consumer Price Index (CPI) rose 0.4% from the previous month and 3.2% from a year earlier in February, slightly higher than January's 0.3% monthly increase and 3.1% annual gain.

    Both measures roughly matched economic forecasts of a 0.4% month-on-month increase and a 3.1% annual increase, according to data from Bloomberg.

    On a “core” basis, which strips out the more volatile costs of food and gas, prices in February rose 0.4% from the previous month and 3.8% from last year. Both measures beat economic expectations of a 0.3% monthly increase and a 3.7% annual gain.

    Read more here.

  • 3 Reasons Apple's Stock Sucks Air

    Shares of Apple ( AAPL ) have looked a little less sweet over the past month.

    Shares of the tech beast fell 8.5%, compared to the S&P 500's 1.8% advance. Pundits have pointed to disappointment that Apple has yet to reveal its AI plans as the main reason for the stock's weakness. Worries about the pace of China's demand didn't help sentiment.

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

    Dharyanani shares three reasons for selling Apple:

    “We've fielded a lot of investor questions about what could unlock the upside for stocks and help pick up momentum again. Overall, we think Three things This is what drives AAPL's “underperformance” over the past few weeks – 1) Risk on + Curve for Nvidia/AI: I hear a lot about this from investors who like to use heavyweight “AI” names like Nvidia ( NVDA ) , especially on the mega-cap side, which makes them more comfortable taking dollars from AAPL. 2) China concerns – Data sets continue to suggest that demand in China is very soft and that Apple is regaining some share within smartphones. 3) Regulatory concerns – It continues to block the comfort surrounding Apple. Notably, we've heard concerns about DOJ/Google implications and EU antitrust issues.”

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