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Wall Street shifted toward modest gains early Tuesday as markets remain focused on U.S. inflation reports later this week and what it could mean for interest rate cuts by the Federal Reserve.
Futures for the S&P 500 rose 0.2% before the opening bell and futures for the Dow Jones Industrial Average rose about 0.1%.
An update on the U.S. consumer price index is due Wednesday, the biggest potential market-moving news since Friday’s jobs report. March’s surprisingly strong employment data showed that workers’ average hourly wages were behaving as expected, even though employers hired far more workers than expected last month.
“The upbeat sentiment stemming from Friday’s jobs report, where indexes surged following wage-growth data suggesting contained inflationary pressures, has set the stage for a white knuckle event as the forthcoming consumer-price index release looms larger than life,” said Stephen Innes, managing partner at SPI Asset Management.
Several economic indicators due this week could further influence expectations. Apart from Wednesday’s report on the inflation that U.S. consumers are feeling at cash registers, there will be reports on inflation at the wholesale level and on expectations for future inflation among U.S. households.
Fed Chair Jerome Powell said recently that he still expects cuts to interest rates this year, but the central bank needs additional confirmation inflation is heading toward its target of 2%. The Fed has been holding its main interest rate at the highest level since 2001, hoping to grind down enough on the economy and prices for investments to get inflation under control. The risk of holding rates too high for too long is that it could cause a recession.
In equities trading, shares of Trump Media & Technology Group stabilized after tumbling more than 8% Monday. The company behind the Truth Social platform has seen its stock price swing sharply by the day, moving more on the hopes of Trump fans than on the profit prospects for the company, which said in regulatory filings this month that it lost more than $58 million last year. The shares have tumbled 44% over the past two weeks and were trading at $37.35 before the bell Tuesday.
Norfolk Southern dipped 2.1% before the bell after the railroad agreed to pay $600 million in a class-action lawsuit settlement related to a fiery train derailment in February 2023 in eastern Ohio. The company said Tuesday that the agreement, if approved by the court, will resolve all class action claims within a 20-mile radius from the derailment and personal injury claims within a 10-mile radius for those choosing to participate.
This week brings the start of another earnings reporting season. Delta Air Lines, JPMorgan Chase and other banks will headline the earliest days of the reporting period. Analysts are expecting companies across the S&P 500 to deliver a third straight quarter of growth.
In Europe at midday, Germany’s DAX shed 0.6%. In Paris, the CAC 40 dropped 0.4% and in London the FTSE 100 edged 0.2% higher.
In Asian trading, Japan’s benchmark Nikkei 225 gained 1.1% and ended at 39,773.13. The Japanese yen languished as the U.S. dollar edged up to 151.91 yen, coming close to a 34-year high of 151.97 yen, which it hit in late March.
The Hang Seng in Hong Kong rose for a second day, adding 0.6% to 16,828.07, and the Shanghai Composite index edged up less than 0.1% to 3,048.54.
In South Korea, the Kospi lost 0.5% to 2,705.16, and Australia’s S&P/ASX 200 gained 0.5% to 7,824.20.
Benchmark U.S. crude added 10 cents to $86.53 a barrel in electronic trading on the New York Mercantile Exchange. Brent crude, the international standard, was 20 cents higher to $90.58 a barrel.
In currency trading, the dollar rose to 151.80 Japanese yen and the euro cost $1.0870, up from $1.0856.
U.S. stock indexes were at a virtual standstill Monday as trading calmed after a whirlwind couple of days left them a bit shy of their records.
The S&P 500 edged down less than 0.1% to 5,202.39. The Dow Jones Industrial Average tiptoed less than 0.1% lower to 38,892.80, while the Nasdaq composite inched 5 points higher to 16,253.96.
