Wall St Set To Rise As Inflation Growth Slows

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Wall Street’s main indexes were set to open slightly higher on Wednesday after data showed that growth in inflation appeared to have peaked, while economically sensitive stocks gained on the passing of a infrastructure bill.

Data showed U.S. consumer prices rose 0.5% last month after climbing 0.9% in June, amid continued supply-chain disruptions and stronger demand for travel-related services.

The data helped calm some fears over early monetary policy tightening by the U.S. Federal Reserve.

Inflation has dictated market sentiment in the past few months, with market participants fearing higher price pressures could force the Fed to pare back its ultra-loose accommodative stance sooner than expected.

“Inflation looks to be as ‘transitory’ as the FOMC have been telling us that it will be … and inflationary forces should continue to ease from here on for the remainder of the year,” said Michael Brown, senior analyst at Caxton, London.

The blue-chip Dow and the benchmark S&P 500 logged record closing highs on Tuesday, as economically sensitive stocks gained with the U.S. Senate’s passage of a $1 trillion bipartisan infrastructure package.

An additional $3.5 trillion investment plan to fight climate change and poverty is also on the cards, but faces stiff resistance from Republicans.

Equipment manufacturers Caterpillar Inc and Deere & Co, construction materials supplier Vulcan Materials Co and steelmaker Nucor Corp rose between 0.5% and 2.9% in premarket trading, adding to sharp gains in the previous session on hopes of reaping gains from infrastructure projects.

At 8:54 a.m. ET, Dow e-minis were up 60 points, or 0.17%, S&P 500 e-minis were up 7 points, or 0.16%, and Nasdaq 100 e-minis were up 49.5 points, or 0.33%.

Energy firms Exxon Mobil Corp, Schlumberger NV, Marathon Oil Corp, Occidental Petroleum Corp and Halliburton Co fell between 0.3% and 0.8%, tracking crude prices. [O/R]

Southwest Airlines Co slipped 2.4% after it warned it may not be profitable in the third quarter, as the more infectious Delta variant of the coronavirus hits bookings.

NortonLifeLock Inc gained 4.9% after the cybersecurity company agreed to buy London-listed rival Avast for up to $8.6 billion.

Coinbase Global Inc rose 4% after the cryptocurrency exchange beat market estimates for second-quarter profit, helped by a near 38% jump in trading volumes on a sequential basis.

– Reuters

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