Dow Jones futures edged lower late Tuesday, along with S&P 500 futures and Nasdaq futures. The stock market rally had a wild session Tuesday, closing lower but off intraday lows. Inflation fears spooked investors worldwide with the consumer price index on tap Wednesday morning.
Tesla (TSLA) remains in focus as it tries to find long-term support following weak China sales figures. Apple stock also is trying to rebound from long-term averages. Facebook stock and Goldman Sachs are finding support in buy zones. Trex and HZO stock pulled back but are just below buy points. Nvidia stock is finding key support after a prior breakout fizzled. RBLX stock skyrocketed following earnings as it sets up another potential IPO base.
The stock market rally had a whipsaw session, with the major indexes tumbling at the open. At one point the Nasdaq was looking like a vertical violation. However the tech-heavy index, which has lagged in recent days and for the past few months, slashed losses. So did the small-cap Russell 2000. The Dow Jones and S&P 500 index were laggards Tuesday, but aren’t far from record highs.
Inflation Data On Tap
The Labor Department releases the April consumer price index at 8:30 a.m. ET. Economists expect the CPI to show a 0.2% gain vs. March. Core CPI, excluding food and energy, is forecast to rise 0.3%. Year over, year, the CPI should pop 3.6%, with core CPI up 2.3%. That include easy comparisons to April 2020, when the global economy slammed on the breaks due to the pandemic and related shutdowns, sending energy prices plunging.
The producer price index, far more sensitive to soaring commodity prices, is due out on Thursday morning.
Still, rising goods prices are starting to filter into the economy, with many companies citing looming margin pressures. Massive government spending, with President Biden pushing another $4 trillion in two packages, is turbocharging economic growth along with a rapid post-pandemic global recovery.
The Federal Reserve says inflation will accelerate in 2021, but then cool off again. The concern is that higher inflation will not be temporary, forcing the Federal Reserve to step in, first by tapering bond buys and eventually higher interest rates.
Keep in mind that the Fed’s favorite inflation gauge, the core PCE deflator, relies heavily on housing prices. While home prices are rising sharply, owner’s equivalent rent is not. Meanwhile, tame medical costs are helping to control overall inflation, even as Americans feel the pinch at the gas station and grocery store.
Dow Jones Futures Today
Dow Jones futures dipped less than 0.1% vs. fair value. S&P 500 futures fell 0.1%. Nasdaq 100 futures retreated 0.1%.
Coronavirus cases worldwide reached 160.28 million. Covid-19 deaths topped 3.32 million.
Coronavirus cases in the U.S. have hit 33.54 million, with deaths above 596,000.
Stock Market Rally Tuesday
The stock market rally finished relatively well, but Tuesday still ended in the loss column.
The Dow Jones Industrial Average fell 1.4% in Tuesday’s stock market trading. The S&P 500 index lost 0.9%, though finishing near session highs. The Nasdaq composite rebounded to lose just 0.1%.
Highly valued tech stocks rebounded, while mining and metals had a strong session. Meanwhile financials retreated somewhat while housing-related names struggled.
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