US Stock Index Futures Ease After Stronger CPI Data

US stock futures eased in late trading on Tuesday following a surge in major indexes despite consumer price index (CPI) data ending above expectations, while markets will now turn their focus on readings for the country’s producer price index (PPI) and retail sales, due later this week.

The S&P 500 futures shed 0.04% at 5,239.00 points, while the Nasdaq 100 futures lost 0.09% to trade at 18,460.00 points. Dow Jones futures were down 0.07% at 39,454.00 points.

Wall Street indexes were mainly led by strength in the tech sector after Austin-based software giant Oracle Corp. reported better-than-expected earnings for the fiscal third quarter and signaled that it was set for growth as its corporate cloud clients tap into artificial intelligence (AI).

The company also said it would make an announcement alongside semiconductor and AI leader Nvidia Corp.

S&P 500 Ends at Record High, PPI, Retail Sales Data in Focus

The S&P 500 index climbed 1.12% to a new record high of 5,175.27 points at the close on Tuesday, finding support in tech stocks as the significant interest in AI curbed the impact of higher consumer inflation.

The tech-heavy Nasdaq Composite closed 1.54% higher at 16,265.64 points, while the Dow Jones Industrial (DJI) Average added 0.61% to 39,005.49 points. However, Boeing Co.’s gains were capped by weaker shares, which fell 4.29% amid the plane maker’s new problems.

US CPI in February rose 3.2% year-over-year (YoY) from January’s reading of a 3.1% growth, beating the median estimate of 3.1%. Still, the data was not enough to weaken views of a June interest rate cut from the Federal Reserve, although the greenback and Treasury yields slightly increased in the session.

The core CPI, which excludes volatile food and energy costs, slipped to 3.8% last month from 3.9% in January but was also above forecasts.

The central bank is keeping an eye on inflation figures, as it requires more proof that price pressures are cooling before it considers reducing interest rates.

Investors will now closely monitor the upcoming February PPI reading and retail sales data, which will be published on Thursday. Retail sales are expected to provide further cues on the health of US consumer spending.

Any indications of easing in the world’s largest economy may be treated as more reason for the Fed to start trimming rates in June. The CME FedWatch Tool showed that traders are pricing in a 70% chance the central bank will lower benchmark interest rates by 25 basis points (bps) in June.

However, all signs so far suggest a robust outlook for the US economy, which might reinforce the case for the Fed to keep monetary policy tight.

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