Wall Street futures rose a few hours before the opening bell Tuesday as the United States and China’s presidents met and investors awaited U.S. inflation data that could influence the Federal Reserve ahead of its December meeting.
The benchmark S&P 500 futures surged 1%, while the Dow Jones industrials advanced 0.6%.
In a report, Craig Erlam of Oanda said, “Equity markets are looking marginally optimistic.” The recent gain is “maybe slowing a little,” he said, but “there doesn’t appear to be much enthusiasm to bail on it at this stage.”
Investors are concerned that central banks’ repeated interest rate rises this year to calm inflation reaching multi-decade highs may tip the global economy into recession.
Traders expected the Fed to boost its benchmark lending rate by half a percentage point in December, following four 0.75 percentage point hikes. According to Fed experts, rates may need to remain high for a lengthy period of time in order to temper prices.
On Tuesday, the government will release data on wholesale inflation in the United States. According to economists, it likely slowed to 8.3% from 8.5% in September.
Lower-than-expected consumer price data last week boosted markets to their best week since the summer.
Walmart soared nearly 7% before the bell as the retail giant disclosed profits and a proposal to resolve lawsuits filed by state and local governments throughout the country over the toll of potent prescription opioids dispensed at its pharmacies.
The $3.1 billion proposal comes on the heels of similar declarations earlier this month by the two largest U.S. pharmacy chains, CVS Health and Walgreen Co., each of which indicated they would pay around $5 billion.
The agreements were reached through conversations with a group of state attorneys general, but they are not final.
Despite a very solid third quarter, Home Depot slid around 2% in premarket after confirming sales growth of roughly 3% for the year, which is lower than most analysts expected.
Presidents Joe Biden and Xi Jinping met on Monday at the Group of 20 major economies summit in Indonesia. This raised hopes for a reduction in tensions between the United States and China in areas such as security, commerce, technology, and human rights.
According to ING’s Robert Carnell and Nicholas Mapa, the meeting was “surprisingly good.”
In Asia, the Shanghai Composite Index climbed 1.6% to 3,134.07 after Chinese consumer expenditure fell 0.5% year on year in October due to anti-virus regulations. Factory activity has also slowed.
Forecasters predict that Chinese economic activity will slow as global central banks raise interest rates, which will reduce demand for exports.
The Hang Seng Index in Hong Kong rose 4.1% to 18,343.12, while the Nikkei 225 in Tokyo rose 0.1% to 27,990.17.
The Kospi in Seoul was up 0.2% at 2,480.33, while the S&P-ASX 200 in Sydney was down less than 0.1% at 7,141.60.
The Sensex in India began down less than 0.1% at 61,559.08. Markets in New Zealand and Southeast Asia advanced.
On the New York Mercantile Exchange, benchmark US crude fell 66 cents to $85.21 a barrel in electronic trading. On Monday, the contract lost $3.09 to $85.87. Brent crude, the international oil trade benchmark, fell 54 cents to $92.60 per barrel in London. The previous session had a $2.85 drop to $93.14.
The dollar fell to 139.36 yen from 139.92 yen on Monday. The euro rose from $1.0353 to $1.0404.
The US government will provide an update on retail expenditure on Wednesday. Economists believe growth accelerated to 0.9% in October, up from a flat performance the previous month.
The Dow dipped 0.6% on Monday, while the Nasdaq fell 1.1%.
Inflation does really play a huge role in today’s market.
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