Stock Market Today: Wall Street Rises After Inflation Surprisingly Slows

NEW YORK — US stocks are rising after a surprisingly encouraging inflation update. YOU&OP 500 rose 0.9% in early trading on Wednesday. The Dow Jones Industrial Average rose 362 points and the Nasdaq Composite rose 1.1%. Treasury yields fell in the bond market after the report showed that U.S. consumer prices rose 3.3% last month from a year earlier, slightly less than expected. Markets recovered broadly after inflation data raised expectations for upcoming interest rate cuts. The Federal Reserve will make its latest rate announcement later on Wednesday, but is expected to hold firm for now.

THIS IS A BREAKING NEWS UPDATE. The previous AP story follows below.

Stocks on Wall Street rose sharply Wednesday morning after the government reported that inflationary pressures eased in Maydata that investors hope could move the Federal Reserve closer to cutting its benchmark interest rate after a 23-year peak.

Major U.S. index futures, which rose a modest 0.1% before the report was released, soared after the report was made public. Dow Jones Industrial Average and S Futures&Each P500 rose 0.7% less than an hour before markets opened.

Treasury yields fell, with the 2-year yield falling to 4.71% from 4.83% late Tuesday and the 10-year yield falling to 4.30% from 4.40% late Tuesday. Last day.

Consumer prices, excluding volatile food and energy costs – the closely watched “core” index – rose 0.2% from April to May, the government said Wednesday. This represents a drop from 0.3% the previous month and was the smallest increase since October. Measured year-over-year, core prices rose 3.4%, below last month’s 3.6% increase and better than the 3.5% Wall Street expected.

Fed officials are examining each month’s inflation data to gauge progress in their years-long fight against rising prices.

The Fed has kept its key interest rate at the highest level in more than two decades and Wall Street currently expects one or two rate cuts this year. Virtually no one expects the Fed to change its key interest rate at its current meeting, which began Tuesday. Political decision makers will be publishing your latest predictions on Wednesday to find out where they see interest rates and the economy.

Data on the economy has been mixed recently and investors are hoping for a slowdown that doesn’t amount to a recession and is of the right magnitude.

The economy remained resilient supported by a strong labor market and consumer spending. Consumers are increasingly stressed, especially those on lower incomes, and retailers have been warning investors about the potential impact on profits and revenue. The US job market has shown some signs of cooling, which could ease inflation but will put more pressure on consumers.

In stocks, Paramount Global continued to fall before the bell after National Amusements – which owns a majority voting stake in the entertainment giant – said on Tuesday that ended negotiations on a possible merger from Paramount with film production company Skydance Media. Paramount shares fell 2.8% before the bell after falling nearly 8% the day before.

While it fell slightly short of Wall Street’s sales and profit targets, Oracle jumped 8% in after-hours trading after the chipmaker revealed a partnership with Google that would link the two companies’ cloud services. Investors were also encouraged by Oracle’s bookings and strong full-year guidance.

In Europe, Germany’s DAX was up 0.5% at midday and the CAC 40 in Paris was up 0.4%. In London, the FTSE 100 rose 0.8%.

In Asian trading, Tokyo’s Nikkei 225 index lost 0.7% to 38,876.71.

Higher inflation and falling wages in Japan are raising questions about how the central bank can move away from near-zero interest rates. The Bank of Japan will issue a policy decision on Friday. In March, increased its benchmark rate from -0.1% to a range of zero to 0.1%, the first such increase in 17 years.

The government reported on Wednesday that producer prices rose 2.4% in May, as the yen’s weakness against the US dollar increases import costs for fuels and industrial components. At the same time, the latest data shows that inflation-adjusted real wages fell in April for the 25th consecutive month.

The concern is that the Bank of Japan will be prevented from raising interest rates due to concerns that higher prices will depress consumer spending, hurting the broader economy.

Elsewhere in Asia, Hong Kong’s Hang Seng index sank 1.3% to 17,947.88, while the Shanghai Composite index recovered, gaining 0.3% to 3,037.47.

S of Australia&P/ASX 200 fell 0.5% to 7,715.50. In Bangkok, the SET was stable.

Gains in technology stocks pushed prices higher in South Korea, where the Kospi rose 0.8% to 2,728.17, and in Taiwan, whose Taiex jumped 1.2%.

In other trading Wednesday morning, benchmark U.S. crude rose $1.12 to $79.02 per barrel in electronic trading on the New York Mercantile Exchange.

Brent crude, the international standard, rose $1.08 to $83 per barrel.

The US dollar fell to 156.20 Japanese yen from 157.14 yen. The euro rose to $1.0830 from $1.0740.

The latest gains come one day after the S&The P 500 and Nasdaq composite indexes hit records for the second day in a row.

YOU&OP 500 rose 0.3% to 5,375.32, driven largely by gains in technology stocks. The tech-heavy Nasdaq composite rose 0.9% to 17,343.55.

The Dow Jones Industrial Average lagged the market, falling 0.3% to 38,747.42.