Wall Street drifts as rate worries hover, ASX set to slip
US stocks rebounded from a steep sell-off as fresh economic data rekindled hopes that inflation remains in a cooling trend.
Interest rate-sensitive megacaps boosted the tech-heavy Nasdaq sharply higher, while the S&P 500 and the Dow both are in the green. The S&P 500 gained 0.8 per cent by mid-afternoon, the Dow Jones was up 0.2 per cent and the Nasdaq added 1.5 per cent.
Wall Street is having a mixed session.Credit: AP
The Australian sharemarket is set to retreat, with futures at 4.55am AEST pointing to a drop of 20 points, or 0.3 per cent, at the open. The ASX lost 0.4 per cent on Thursday.
The Producer Prices index (PPI) came in cooler than expected, supporting the narrative that price growth is still cooling.
On Wednesday, hotter-than-expected CPI data sent stocks sharply lower and benchmark Treasury yields to their highest level since November. The report doused hopes that the central bank could implement as many as three rate cuts before year-end, possibly starting as soon as its June policy meeting.
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“There’ been a lot of trepidation in the market, even heading into the CPI reading yesterday,” Joseph Sroka, chief investment officer at NovaPoint in Atlanta. “There was probably an equal amount of trepidation coming into today for the PPI report, which was obviously more in line with expectations.”
While the PPI data was more encouraging, the data did indicate that inflation’s journey down toward the central bank’s annual 2 per cent target might be too meandering for the Fed.
John Williams, President of the Federal Reserve Bank of New York, said “there’s no clear need to adjust monetary policy in the very near term.”
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