The US stock market saw a boost on Thursday morning as major indexes rebounded from Wednesday’s sell-off. The positive momentum came after the release of data showing that wholesale prices increased less than expected in March.
According to the Bureau of Labor Statistics, the producer price index rose by 0.2% for the month, falling short of the 0.3% estimate from economists. While the reading was below expectations, it still marked the biggest jump in 11 months. Core PPI, which excludes food and energy, also climbed by 0.2%, in line with forecasts.
The news of lower-than-expected inflation in wholesale prices provided some relief to investors, who have been closely monitoring inflation data amid concerns about potential interest rate hikes by the Federal Reserve. The latest data on consumer price index, released on Wednesday, showed a year-over-year inflation increase of 3.5% in March, higher than expected.
George Ball, chairman of Sanders Morris, emphasized the importance of the upcoming PCE report at the end of April, which is considered the most accurate gauge of inflation by the Fed. He noted that until then, market speculation on interest rate cuts will continue to drive volatility.
Despite the uncertainty surrounding interest rates, Ball expressed optimism about corporate earnings, predicting strong performance for the S&P 500 this year. He highlighted that earnings are expected to reach $250 per share, exceeding market expectations.
As of Thursday morning, major US indexes were trading higher, with Treasury yields edging lower. West Texas Intermediate crude oil fell slightly, while gold prices rose. Bitcoin also saw a modest increase in value.
Overall, the latest data on wholesale prices and unemployment claims provided some reassurance to investors, but the focus remains on upcoming inflation reports and corporate earnings as key drivers of market performance in the coming months.
