Waning Inflation Pressures Keep Alive Hopes for at least One Rate Cut in 2024

Barry Adams
13 Jun, 2024
New York City

Benchmark indexes are set to advance to a new record close for the third day in a row after the second report on inflation showed waning price pressures. 

The S&P 500 index and the Nasdaq Composite hovered around the flatline after producer price inflation eased more than expected, a day after consumer price inflation unexpectedly cooled in May. 

Producer price inflation slowed to an annual pace of 2.2% in May from 2.3% in April, the U.S. Bureau of Labor Statistics reported Thursday. 

Core producer prices, which exclude food, energy, and trade services, rose at an annual pace of 3.2%, matching the rate in April. 

On a monthly basis, producer prices declined 0.2% after rising 0.5% in April, and most of the decline in inflation could be traced to a 7.1% fall in gasoline prices. 

The latest update on factory-gate inflation follows the Federal Reserve's decision to hold its target rate range between 5.25% and 5.50%. 

 

U.S. Indexes and Treasury Yields

The S&P 500 index increased 0.2% to 5,430.37, and the Nasdaq Composite advanced 0.7% to 17,737.21. 

The yield on 2-year Treasury notes edged higher to 4.72%, 10-year Treasury notes decreased to 4.27%, and 30-year Treasury bonds edged higher to 4.47%.

WTI crude oil increased $0.17 to $78.67 a barrel, and natural gas prices fell 7 cents to $3.01 a thermal unit.

Gold increased by $6.34 to $2,314.35 an ounce, and silver fell 29 cents to $29.25. 

The dollar index, which weighs the U.S. currency against a basket of foreign currencies, edged lower to 104.91.

 

U.S. Stock Movers

Dave & Buster's plunged 12.3% to $44.12, and the restaurant chain operator reported sharply lower-than-expected revenue in the first quarter. 

Broadcom soared 11.3% to $1,671.99 after the company posted better-than-estimated fiscal second quarter revenue of $12.49 billion and adjusted earnings of $10.96 per share. 

Oxford Industries declined 4.5% to $96.95 after the parent company of the apparel retailer Tommy Bahama reported less-than-expected revenue in the first quarter of $398.2 million and adjusted earnings per share of $2.66.