Wall Street opens in the green, with major indices rising around 0.8%.
Analysts expect the Federal Reserve to focus on core inflation when deciding the optimal timing to cut rates. CPI data was on point.
On Tuesday, Wall Street opened in the green, with the Dow Jones Industrial Average, its main indicator, rising by 0.24%, as investors analyzed the latest inflation data.
Ten minutes after the market opened, the S&P 500 index was up by 0.8%. The Nasdaq Composite index, where major technology companies are listed, rose by 0.61%, reaching 18,327 units.
The Consumer Price Index (CPI) of the United States rose by 3.2% in February on a year-on-year basis, while compared to the previous month, it increased by 0.4%, exceeding analysts’ expectations and well above the Federal Reserve’s 2% target.
Most of the increase, 60%, was attributed to rising prices of housing and gasoline, with the energy price index rising by 2.3% compared to January, while food prices remained nearly unchanged, as reported by the Bureau of Labor Statistics (BLS).
The core price index, excluding food and gasoline, increased by 0.4% in February compared to January, at the same pace as the previous month.
Investors are now focusing on the upcoming Federal Reserve monetary policy meeting scheduled for later this month.
In terms of sectors, losses dominated, led by utilities (-0.56%) and energy (-0.55%), while the technology (0.62%) and communication (0.33%) sectors saw the largest gains.
Among the 30 stocks of the Dow Jones, notable gains were seen in 3M (NYSE:MMM) (6.61%) and Microsoft (NASDAQ:MSFT) (1.11%), while losses were observed in Boeing (NYSE:BA) (-3.53%) and Apple (NASDAQ:AAPL) (-0.83%).
Analysts expect the Federal Reserve (Fed), the U.S. central bank, to focus on core inflation when deciding the optimal timing to begin interest rate cuts.
However, “core” inflation remains above the 3.7% projected by analysts and exceeds the Fed’s long-term target of 2 percent.
To curb persistent price increases, the Fed embarked on a series of rapid interest rate hikes in 2022 before maintaining rates at their highest level in more than two decades of monetary policy meetings. The Federal Reserve has stated that it could begin reducing rates this year, provided there are continued advances in combating inflation.
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