Stock futures rose on Tuesday after another report indicated that inflation may slow, reigniting a rally in stocks.
Futures linked to the Dow Jones Industrial Average rose 412 points, or 1.2%. S&P 500 futures added nearly 2% and Nasdaq-100 futures added 3%.
The Produce Price Index, a measure of wholesale inflation, rose 0.2% for the month, against the Dow’s consensus estimate for a 0.4% increase.
Wal-Mart stock I jumped in pre-market trading After the company beat Wall Street’s earnings and revenue estimates and boosted its full-year guidance. Home Depot reported strong results as well but kept guidance in place for the full year. Its shares fell slightly.
The Producer Price Index, which measures wholesale inflation, is due for release at 8:30 a.m. ET. The report comes after the latest CPI data showed signs of easing inflationary pressure last month, which led to a sharp rush to end trading last week.
“After last week’s CPI spurred a sharp rally in stocks and a reversal in the dollar, an important theme for markets this week will be the Fed’s reaction,” Huw Roberts, head of analytics at Quant Insight, wrote in a note Monday.
Federal Reserve Governors Christopher Waller and Lyle Brainard spoke on Sunday and Monday, respectively, about the likely future course of monetary policy. Waller said the market was overly optimistic and should prepare for higher rates, while Brainard said the central bank could moderate interest rate increases.
Philadelphia Fed President Patrick Harker, Fed Governor Lisa Cook, and Fed Vice Chair for Supervision Michael Barr are scheduled to speak on Tuesday.
Elsewhere, Taiwan Semiconductor, Louisiana-Pacific and Paramount jumped after regulatory filings showed Warren Buffett’s Berkshire Hathaway It bought new positions in the first two, and raised its stake in the last two.
Earnings season continues this week with retail reports from Target, Lowe’s, Bath and Body Works, Macy’s, Kohl’s, and Foot Locker on deck.
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