Stock market today: Wall Street unchanged ahead of new inflation and retail sales

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Trading on Wall Street was muted early Wednesday ahead of the U.S. government’s latest reports on inflation and retail sales.

Futures for the S&P 500 and the Dow Jones Industrial Average both ticked up less than 0.1% before the opening bell.

The Labor Department will release its monthly update on consumer prices, or inflation faced by households about an hour before the market opens. Economists expect the consumer price index to ease modestly to 3.4% in April on a year-over-year basis.

A report Tuesday showed that prices remain stubbornly high at the wholesale level, before prices changes are passed on to consumers. The producer price index reading for April reached 0.5%, higher than forecast.

The rate of inflation has been ticking higher in 2024, raising concerns that the Federal Reserve could be struggling to trim inflation to its goal of 2%.

Investors were reassured by comments made by Fed Chair Jerome Powell on Tuesday. Speaking at a panel discussion in Amsterdam, Powell reaffirmed that the U.S. central bank is unlikely to raise its key interest rate to respond to stubborn inflation. But he also said that his confidence that inflation will ease is “not as high as it was” because price increases have been persistently hot in the first quarter.

The government will also release its retail sales report for April, which analysts expect to show that consumer spending softened in April. Despite the recent pullback, American consumers have been a big reason the economy has forged ahead during this era of elevated inflation and two-decade high interest rates.

Elsewhere, in Europe at midday, Britain’s FTSE 100 was up 0.1% after hitting a record high in early trading. Germany’s DAX was up 0.4% and the CAC 40 in Paris was off 0.1%.

In Asian trading, Tokyo’s Nikkei 225 index climbed 0.1% to 38,385.73 and Australia’s S&P/ASX 200 advanced 0.4% to 7,753.70.

The Shanghai Composite index slipped 0.8% to 3,119.90 after the central bank kept a key lending rate unchanged Wednesday, signaling Beijing’s focus on maintaining monetary stability.

Taiwan’s Taiex gained 0.8%. In Bangkok, the SET lost 0.6%.

Markets in South Korea and Hong Kong were closed for holidays.

Bond yields edged lower. The yield on the 10-year Treasury slipped to 4.43% Wednesday from 4.49% late Monday.

Investors have been curtailing their expectations for the speed and frequency of interest rate cuts this year as inflation remains hotter than expected. Traders are betting on one or two rate cuts this year, according to data from CME Group.

Wall Street is still hoping the Fed can pull off its “soft landing,” where high interest rates work to cool inflation without slowing the economy into a recession. The economy remains strong, but consumers might be showing signs of fatigue under the weight of stubborn inflation.

In other trading, benchmark U.S. crude slipped 54 cents to $77.48 a barrel in electronic trading on the New York Mercantile Exchange. Brent crude, the international standard, lost 57 cents to $81.81 a barrel.

The U.S. dollar slipped to 155.61 Japanese yen from 156.42 yen. The euro cost $1.0835, up from $1.0820.

On Tuesday, the S&P 500 index rose 0.5% and the Dow Jones Industrial Average rose 0.3%.

The Nasdaq composite, which is heavily influenced by technology stocks, jumped 0.8% to 16,511.18, its highest close ever. The tech sector has been a driving force for much of the broader market’s gains this year.

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