Wall St set to open higher as traders stick to rate cut bets after inflation data

WALL Street’s main stock indexes were on track to a higher opening on Thursday as investors kept bets of interest-rate cuts in the coming months alive despite slightly hotter-than-expected inflation data.

A Labor Department report showed the Producer Price Index (PPI) rose 0.6% month-on-month in February, compared with a 0.3% increase expected by economists polled by Reuters.

It rose 1.6% in the 12 months to February, versus an estimated growth of 1.1%.

U.S. retail sales rose 0.6% month-on-month in February, compared to an estimated 0.8% increase, a separate report from the Commerce Department showed.

“The retail sales was slightly weaker, so it’s taking the edge off of the PPI number,” said Andre Bakhos, managing member at Ingenium Analytics.

The PPI number was not in line with the perception that the Fed will cut rates, Bakhos said.

However, the hotter-than-expected producer prices and

weaker-than-expected consumer spending

did little to budge financial market bets on a June start to the Federal Reserve’s interest-rate cuts, based on futures contract prices that settle to the U.S. central bank’s policy rate.

Meanwhile, the number of Americans filing for unemployment claims stood at 209,000 for the week ended March 9, compared to an estimated 218,000 claims, according to another Labor Department report.

The slew of economic data comes ahead of the Fed’s policy meeting next week, where the focus will be on possible cues about how soon the central bank could kick off the rate-easing cycle.

At 08:45 a.m. ET, Dow e-minis were up 153 points, or 0.39%, S&P 500 e-minis were up 13.5 points, or 0.26% and Nasdaq 100 e-minis were up 48.75 points, or 0.27%.

The tech-heavy Nasdaq and the S&P 500 closed lower on Wednesday, as investors booked profits from high-flying chip stocks ahead of the key economic data.

Most megacap growth and technology stocks inched higher in premarket trading, but artificial intelligence (AI) giant Nvidia fell 1.7%.

Shares of Robinhood Markets jumped 11.5% after the trading app operator said its assets under custody rose 16% in February.

Citigroup added 2.0% after Goldman Sachs raised the lender’s rating to “buy” from “neutral”.

SentinelOne eased 6.6% after the cybersecurity firm forecast FY25 revenue below analysts’ expectations.

Aerospace and defense company RTX gained 1.9% after Wells Fargo upgraded its rating to “overweight” from “equal weight”. – Reuters