Tech titans helped drive gains in the Nasdaq and S&P 500 after PPI data broadly met expectations, tempering concerns about inflation following Wednesday’s figures showing a third consecutive upside miss in consumer prices
Asian markets mostly dropped on Friday as traders struggled to build on Wall Street’s positive lead, with hopes for a June interest rate cut fading, while earnings season gets underway in the US amid optimism for companies’ profit outlooks.
Tech titans helped drive gains in the Nasdaq and S&P 500 after producer price index (PPI) data broadly met expectations, tempering concerns about inflation following Wednesday’s figures showing a third consecutive upside miss in consumer prices.
The CPI data followed a string of indicators indicating the US economy remained strong and the jobs market resilient despite interest rates sitting at two-decade highs and inflation still well above the Fed’s target.
That has seen investors cut their rate cut bets from six at the start of the year to two now, while former Treasury secretary Lawrence Summers has even cautioned a hike could not be ruled out.
Central bank officials were reluctant to give their full backing to any cuts soon.
New York Fed chief John Williams said “tremendous progress” had been made in the fight against inflation but there was little need to move in the “very near term”, while Richmond boss Thomas Barkin said that decision-makers could take their time.
Their Boston counterpart Susan Collins said the latest data “implies that less easing of policy this year than previously thought may be warranted”.
While US traders pounced on the producer price numbers, Michael Shaoul at Marketfield Asset Management commented: Although we understand the relief with which this report will be received, there is nothing very encouraging contained within it – and the best that can be said is that there was ‘no new bad news’ either.
Asian traders were also less impressed.
Hong Kong, Shanghai, Sydney, Seoul, Singapore and Wellington were all in the red, while Tokyo, Taipei and Manila rose slightly.
