Monday saw U.S. stock index futures experience a slight upswing as Wall Street found solace in milder inflation data, kick-starting a week that’s expected to be shorter due to the holiday season. At 5:50 AM ET (10:50 AM GMT), there was a marginal rise in the market, with certain indices recording an increase of 0.1-0.3%.
This week’s trading is predicted to be relatively subdued, as the New York Stock Exchange will close early on Christmas Eve and remain closed on Christmas Day.
Investors are keenly observing the PCE data to ascertain the potential rate outlook. PCE data, a crucial measure of inflation favored by the Federal Reserve, recorded a slower growth rate in November (0.1%) compared to October’s increase (0.2%). The yearly PCE inflation rate reached 2.4%, slightly lower than the predicted 2.5%.
Despite the recent data indicating a slow down in inflation, it still surpassed the Federal Reserve’s annual target of 2%, suggesting that overall inflation remains persistent. The Federal Reserve has adopted a cautious stance towards modifications in monetary policy, emphasizing the importance of ongoing progress in inflation before contemplating additional rate cuts.
Wall Street’s recent trading activity has seen considerable fluctuation. The blue-chip index experienced a 10-day losing streak, the longest since 1974, plunging over 1,000 points last Wednesday after the Federal Reserve indicated fewer rate cuts for 2025 than previously anticipated.
However, the cooler-than-expected inflation data on Friday helped the market recuperate some losses. As per monthly data, the DJIA has dropped by 4.6% in December, while another index has seen a decrease of 1.7%. The tech-heavy index, however, defied this downward trend, recording a rise of 1.8% this month.
In corporate updates, Rumble, an online video platform, witnessed a substantial surge of over 45% in premarket trading following a significant investment of $775 million from digital assets company, Tether, known for its USDT stablecoin.
Crude prices experienced a minor dip on Monday as traders assimilated milder than anticipated inflation data and the avoidance of a US shutdown. By 5:50 AM ET, US crude futures (WTI) had dropped by 0.3% to $69.23 a barrel, whereas Brent contracts fell by 0.4% to $72.34 a barrel.
President Joe Biden’s approval of a stop-gap spending bill, ensuring government funding until March, has assuaged concerns of a potential shutdown that could have disrupted travel and negatively impacted fuel demand during the holiday season. The cooling of price pressures has also opened up possibilities for further Fed interest rate cuts next year, potentially stimulating economic activity.
