Hotter-Than-Expected Inflation Data May Lead To Initial Pullback On Wall Street
(RTTNews) - Stocks may move to the downside in early trading on Tuesday, giving back ground following the substantial rally seen to start the week. The major index futures are currently pointing to a lower open for the markets, with the S&P 500 futures down by 0.8 percent.
The futures came under pressure following the release of a closely watched Labor Department report showing consumer prices increased by more than expected in the month of October.
The Labor Department said its consumer price index rose by 0.4 percent in October after climbing by 0.6 percent in September. Economists had expected consumer prices to rise by 0.3 percent.
The report said core consumer prices, which exclude food and energy prices, climbed by 0.3 percent in October, matching the increases seen in the two previous months. Core prices were expected to edge up by 0.2 percent.
The Labor Department noted it is not able to provide data on the annual rate of consumer price growth due to the government shutdown in October 2025.
The hotter-than-expected inflation data may lead to renewed concerns about the outlook for interest rates ahead of the Federal Reserve's monetary policy meeting next month.
CME Group's FedWatch Tool is currently indicating an 86.4 percent chance the Fed will raise rates by a quarter point at its December meeting.
Before the release of the data this morning, Fed Governor Christopher Waller said he is "leaning toward" a rate hike in December and would support "more robust action" if inflation exceeds estimates.
"In that case, I believe a 50 basis point hike in the policy rate should be considered at the December meeting," Waller said at a conference in London. "Hiking only 25 basis points would put our credibility at risk, a risk I am not eager to take."
Following the rebound seen during last Friday's session, stocks showed a more substantial move to the upside during trading on Monday. The major averages all moved sharply higher, with the tech-heavy Nasdaq leading the charge.
The major averages pulled back off their highs going into the close but still posted strong gains. The Nasdaq spiked 673.71 points or 2.7 percent to 25,253.14, the S&P 500 surged 173.08 points or 2.4 percent to 7,549.94 and the Dow jumped 1,104.02 points or 2.2 percent to 52,389.75.
In overseas trading, stock markets across the Asia-Pacific region moved mostly higher during trading on Tuesday. Japan's Nikkei 225 Index shot up by 2.9 percent, while South Korea's Kospi soared by 4.4 percent.
The major European markets have also moved to the upside on the day. While the U.K.'s FTSE 100 Index is up by 0.6 percent, the French CAC 40 Index is up by 1.2 percent and the German DAX Index is up by 1.3 percent.
In commodities trading, crude oil futures are plunging $2.32 to $84.53 a barrel after plummeting $3.98 to $86.85 a barrel on Monday. Meanwhile, after jumping $39.60 to $4,114.50 an ounce in the previous session, gold futures are tumbling $63.40 to $4,051.10 an ounce.
On the currency front, the U.S. dollar is trading at 158.46 yen compared to the 157.90 yen it fetched at the close of New York trading on Monday. Against the euro, the dollar is valued at $1.1185 compared to yesterday's $1.1223.
