US Stock Markets Open Tentatively As Inflation Dips

US Inflation is down to its lowest point in years. With the 12-month inflation rate down to 2.9%, the stock market is gaining some small confidence.

This small downtick has the market trading slightly elevated today, with the Dow Jones up by 0.17%, and the S&P 500 up by 0.11%. The Nasdaq rounds out the top three indices with a 0.3% gain.

These increases may not hold, but for now, the stock market is looking mildly positive after CPI data has come in. Those numbers show that CPI is up 0.2% for the month and annual inflation is down to 2.9%. The last time annual inflation was this low was back in March of 2021, and once those numbers are processed by the wider market, we could see a short term boost.

Core CPI, which details the price of consumer goods that leaves out food and energy costs, showed a 0.2% increase. That was in line with expectations, as was the annual rate, which came in at 3.2%. When the numbers line up with expectations on CPI reports, the market tends to react less dramatically than it would otherwise. That is good news for investors.

What Today’s Data Means

The change in inflation is not dramatic, but when viewed on a scale of how it has been moving since the pandemic, today’s numbers are looking good. We could see consumer confidence grow in the investment market, and that may bleed over to good news for the US dollar as well as for the cryptocurrency market and the commodities market.  

The central bank has held a target of 2% for inflation, which we have seen the numbers slide back towards slowly. The rate of inflation decrease is so small as to frustrate the markets, though, and that is demonstrated by today’s timid trading despite positive news on the economy.

As the data is further analyzed, we expect trading to pick up. Most of the movement will likely happen over on the tech-heavy Nasdaq index, which tends to be relatively recession proof compared to the other indices.