Wall St set to open higher on fresh evidence of cooling inflation

  • US prices rise slightly more than expected
  • Walmart jumps on strong forecast, buyback plan
  • Home Depot keeps the forecast unchanged
  • Futures: Dow 1.02%, S&P 1.78%, Nasdaq 2.75%

Nov 15 (Reuters) – Wall Street’s major indexes were set for a higher open on Tuesday as U.S. producer prices rose more slowly than expected in October, providing fresh evidence of cooling inflation and bolstering hopes for lower interest rate hikes. .

The Labor Department’s inflation rate rose 8% in the 12 months through October, lower than the 8.3% increase. Producer prices rose 8.5% in September.

The report follows lower-than-expected interest rates at the end of last week that sparked a major economic rally on hopes that the Federal Reserve will end its crisis that has plagued markets this year.

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“It (the data) will confirm people’s expectations that inflation is starting to come down. This will give the market more confidence,” said Robert Pavlik, chief operating officer at Dakota Wealth in Fairfield, Connecticut.

Traders are now pricing in a 91% chance of a 50 basis point hike at the December Fed meeting.

The focus was also on earnings reports from retailers, with Walmart ( WMT.N ) raising its full-year sales expectations and announcing a new $20 billion purchase plan.

Shares of the top U.S. retailer jumped 7.4% in premarket trading, while Home Depot Inc ( HD.N ) fell 1.3% as the home improvement chain left its annual forecast unchanged despite a rise in quarterly results.

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Information on other economic factors including retail sales and housing starts as well as Fed officials’ remarks this week will also be used by investors as they try to gauge the path of future rate hikes.

Federal Reserve Vice Chairman Lael Brainard on Monday joined Governor Christopher Waller in signaling that the US central bank is willing to introduce a small rate hike, stressing the need to raise rates to curb inflation.

At 8:44 am ET, Dow e-minis were up 342 points, or 1.02%, S&P 500 e-minis were up 70.75 points, or 1.78%, and Nasdaq 100 e-minis were up 323.25 points, or 2.75%.

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Shares of US-listed Taiwan Semiconductor Manufacturing ( TSMC ) jumped 11% after Warren Buffett revealed that Berkshire Hathaway ( BRKa.N ) bought more than $4.1 billion worth of stock in the company.

Among other stocks, shares of US-listed Tencent Music Entertainment Corp jumped 10.3% after the Chinese music streaming company reported third-quarter revenue and profit gains.

Reporting by Shubham Batra, Sruthi Shankar, Amruta Khandekar and Ankika Biswas; Edited by Shounak Dasgupta and Arun Koyyur

Our Standards: Thomson Reuters Trust Principles.


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