Wall St up after “mixed” producer inflation data, all eyes on CPI

Wall St up after “mixed” producer inflation data, all eyes on CPI
Wall St up after “mixed” producer inflation data, all eyes on CPI

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* Producer prices increase more than expected in April

* Fed’s Powell: Producer price index ‘mixed’, next move unlikely to be a rate hike.

* Meme stocks extend Monday’s gains

* Alibaba falls after 4th quarter profit decline

* The indices are up: Dow 0.11%, S&P 0.18%, Nasdaq 0.43%.

May 14 (Reuters) – Wall Street’s main indexes edged higher on Tuesday as investors priced a mixed rise in producer prices and waited for crucial consumer price data due later in the week that could bring more clarity on the trajectory of interest rates in the world’s largest economy.

U.S. producer prices rose more than expected in April amid sharply rising costs of services and goods, leading traders to reduce their bets on a first rate cut in September.

“Investors are looking at some revisions to the producer price index and saying it wasn’t that bad, but they’re ending up with a pretty high number,” said Paul Nolte, portfolio manager at Kingsview Asset Management.

“What investors can also consider is that some of these numbers are reflected in the profits of many companies in the form of higher prices.”

Federal Reserve Chairman Jerome Powell also said the PPI report was more “mixed” than “hot,” given that earlier data was revised downward.

Mr. Powell added that he did not expect the central bank’s next interest rate decision to be an increase, despite the recent run of higher-than-expected inflation.

Attention will now turn to Wednesday’s consumer price figures, which will help determine whether the first quarter’s upward surprises were just a blip or a worrying trend.

Stagnant inflation and continued strength in the labor market have prompted financial markets and most economists to push back forecasts of the Fed’s first interest rate cut to September, instead of March. at the beginning of the year.

Still, stocks have rallied since the start of the year, with all three major U.S. indexes nearing new record highs on better-than-expected first-quarter profits and hopes the Fed will cut interest rates during the year.

As of 11:15 a.m. ET, the Dow Jones Industrial Average was up 41.64 points, or 0.11%, at 39,473.15, the S&P 500 was up 9.36 points, or 0.18%. , at 5,230.78, and the Nasdaq Composite was up 69.83 points, or 0.43%, at 16,458.07.

Alibaba’s publicly traded shares fell 6.7% after reporting an 86% fall in fourth-quarter profit.

On Holding soared 15.7% after the shoe maker posted an above-average quarter of sales thanks to strong demand for its running shoes.

Meanwhile, US President Joe Biden unveiled a package of steep tariff increases on a range of Chinese imports, including electric vehicles, computer chips and medical products.

U.S.-listed shares of Chinese electric vehicle maker Li Auto fell 2.5%, while Tesla gained 4.3%, leading gains among mega-capital growth and technology stocks.

GameStop surged 73.5%, ready to extend its rally after flagship Roaring Kitty posted on X.com for the first time in three years.

Other participants in the 2021 meme rally and heavily discounted stocks such as AMC Entertainment and Koss Corp rose 88.6% and 46.2%, respectively.

Rising stocks outnumbered falling stocks by a ratio of 2.78 to 1 on the NYSE and 2.23 to 1 on the Nasdaq.

The S&P recorded 25 new 52-week highs and no new lows, while the Nasdaq recorded 38 new highs and 32 new lows. (Reporting by Bansari Mayur Kamdar and Shristi Achar A in Bengaluru; Editing by Sriraj Kalluvila and Devika Syamnath)

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