©Reuters
Investing.com — Markets are awaiting new U.S. inflation data that could factor into how the Federal Reserve approaches potential interest rate cuts this year. Stock futures on Wall Street have risen significantly, far outpacing the data. Oracle (NYSE:) stock soared in after-hours trading after the tech company posted AI-driven gains, but Oracle's price remains just below its recent high.
1. Future outlook for inflation data
U.S. inflation data for February will be in the spotlight on Tuesday, with markets watching to see if the numbers provide any clues about the future direction of the Federal Reserve's monetary policy.
Economists expect the overall consumer price index (CPI) to match last month's annualized pace of 3.1%. The so-called “core” CPI, which excludes volatile items such as food and fuel, is expected to slow to 3.7% from 3.9% in January.
However, more focus is likely to be placed on month-on-month indicators that could reveal upward momentum in prices. The headline number is expected to accelerate slightly to 0.4%, while the core number is expected to decelerate slightly to 0.3%.
Fed officials have made curbing inflation the main objective of a series of rate hikes that have pushed borrowing costs to their highest levels in more than 20 years. Both leaders have hinted that interest rates could be cut later this year, but first they need to see more evidence that inflation is falling sustainably to the 2% annual target. emphasized.
“In the eyes of the Fed, [inflation] It is likely still too hot for comfort,” ING analysts said in a note.
2. Futures are mostly up.
US stock futures were mostly higher ahead of the CPI release.
By 04:30 ET (08:30 GMT), the contract was up 18 points or 0.1%, up 15 points or 0.3% and up 92 points or 0.5%.
The tech-heavy benchmark fell on Monday, weighed down by declines in semiconductor stocks such as Nvidia (NASDAQ:) and Advanced Micro Devices (NASDAQ:). Shares of many major tech groups have fallen sharply over the past two sessions as investors locked in recent gains in the sector ahead of the release of key inflation data.
It outperformed the major indexes on Monday. Boeing Co. (NYSE:) shares fell after reports that the company is under investigation by the Department of Justice over the mid-air fuselage failure of a 737 Max jet operated by Alaska Airlines in January. Regardless, the blue chip index rose 0.1%.
3. Oracle stock soars after financial results
Oracle was one of the best performing companies in after-hours trading, surging nearly 14% after posting a better-than-expected quarterly profit on increased demand for its AI products.
Earnings per share, excluding third-quarter fiscal items, rose 16% to $1.41, beating the Bloomberg consensus estimate of $1.38, and adjusted revenue of $13.28 billion was in line with expectations. did.
The cloud computing company said it would make a joint announcement with Nvidia this week, and mentioned the AI darling multiple times on a post-earnings conference call with analysts. Nvidia makes AI-optimized chips that can be used by customers of Oracle's cloud services.
Oracle's rally spread to other tech giants after the market closed on Monday, illustrating the impact of recent months of enthusiasm for AI on stock gains. Nvidia rose 2.0%, while Microsoft (NASDAQ:) and Alphabet (NASDAQ:) were both up 0.6% by 4:06 ET.
4. Bitcoin is expected to remain at record highs
Bitcoin remains below its all-time high in European trading, continuing to be supported by steady inflows to spot exchange-traded funds that were given the green light by U.S. regulators earlier this year.
The world's largest cryptocurrency was up 0.8%, trading at $71,707.1 by 4:16 ET, paring some of the gains carved out in Asian trading but still at an all-time high of $72,771, set on Monday. It is at a level close to that of
Bitcoin’s recent rally extends the rally partially driven by the approval of spot ETFs in January, which led to large amounts of institutional capital flowing into the token.
Bitcoin was also boosted by MicroStrategy, the digital asset's largest corporate holder, using debt to buy 12,000 tokens on Monday.
5. Oil edge up
Oil prices edged higher on Tuesday, but gains were limited as traders remained largely cautious ahead of U.S. inflation data and looked ahead to the OPEC oil group's upcoming monthly report. Ta.
Oil prices have remained mostly range-bound in recent trading amid conflicting signals about supply and demand. Brent and WTI futures have been trading in a range of $85 to $75 per barrel for the past three weeks.
Oil markets are assessing signals of weak demand from China, the world's largest crude oil importer. The Chinese government has set a moderate growth target for 2024, but has also offered little insight into further stimulus. Those concerns were partially offset by demand expectations as several domestic refineries began ramping up production after a long shutdown.
The market is now awaiting further clues on demand, especially after the Organization of the Petroleum Exporting Countries announced that it would maintain the current pace of production cuts until the end of June.
Meanwhile, there is little sign that the Israel-Hamas war is escalating, suggesting continued supply risks in the Middle East.
Prices expiring in May rose 0.9% to $82.94 per barrel and rose 0.9% to $78.24 per barrel by 4:26 ET.