Live updates on stock market news: Stock futures jump after core inflation reading comes in lower than expected

U.S. stock futures rose early on Tuesday after core inflation data came in lower than expected.

Futures linked to the S&P 500 (^GSPC) jumped 1.7%, while Dow Jones Industrial Average futures (^DJI) advanced by 1.03%. The tech-heavy Nasdaq Composite (^IXIC) rose as much as 2.6% in premarket trading.

The producer price index (PPI) in October fell to 8.0% year-on-year from 8.5% in September, after economists polled by Bloomberg had forecast 8.3%. Annual core PPI also surprised at 6.7%, compared with a consensus estimate of 7.2%. The PPI report comes next other key inflation data came in lower than expected on Thursday, with consumer prices rising 0.4% in October and core prices adding 0.3%.

The yield on the benchmark 10-year Treasury rose to 3.7 percent, while the dollar index, which measures the currency against six peer currencies including the yen and the euro, fell 0.78 percent to $105.83.

Stock up finished lower Monday after last week’s rally as investors digested fresh comments from Federal Reserve officials about the outlook for interest rate hikes. Fed Vice Chairman Lael Brainard said on Monday: “I think it will probably be appropriate to move to a slower pace of increases soon.”

Some strategists said Monday’s declines were not due to Brainard’s comment, but rather a signal of what could be to come.

“The latest in a growing wave of evidence that the FOMC will move 50 basis points in December, instead of the 75 basis point pace they’ve been at since June,” strategists at Bespoke Investments wrote in a note to clients.

Brainard’s comments came after Fed Governor Christopher Waller echoed Fed Chairman Jerome Powell’s recent comments that policymakers have “some way to go” before the central bank stops raising rates.

“Markets are having a hard time adjusting to where we think the final Fed funds rate is headed and what that will mean for the economy and earnings as we head into next year,” said Rob Howarth, senior investment strategist at US Bank Wealth Management Yahoo Finance Live on Monday.

The Biden-Si meeting was the first between the leaders of the world’s two largest economies since Biden took office.

“As leaders of our two nations, I think we share a responsibility to show that China and the United States can manage our differences, prevent competition from turning into anything close to conflict, and find ways to work together on urgent global issues that require our mutual cooperation,” Mr. Biden said at the opening of the meeting.

U.S. President Joe Biden shakes hands with Chinese President Xi Jinping as they meet on the sidelines of the G20 leaders' summit in Bali, Indonesia, November 14, 2022. REUTERS/Kevin Lamarck

U.S. President Joe Biden shakes hands with Chinese President Xi Jinping as they meet on the sidelines of the G20 leaders’ summit in Bali, Indonesia, November 14, 2022. REUTERS/Kevin Lamarck

Home Depot (HD) kicked off the main retailer earnings week with sales rising 5.6% in the third quarter, beating analysts’ expectations as higher prices offset a slowdown in transactions. Walmart (WMT) also won Wall Street Expectations for the quarter and raised its outlook as the retailer “significantly improved” its excess inventory. The discounter’s inventory increased 13% year over year in the third quarter, down from 25% in the prior quarter.

Target (TGT), Lowe (LOW) and TJMaxx (TJX) plans to release earnings on Wednesday.

Elsewhere, cryptocurrency prices have generally stabilized following FTX’s bankruptcy filing last week. Bitcoin (BTC), traded at $16,801 on Tuesday morning, while Ether (ETH), the second most popular cryptocurrency, trading at $1,262.96.

Danny Romero is a reporter for Yahoo Finance. Follow her on Twitter @daniromerotv

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