US stocks edge higher after CPI release; further rate cuts likely

U.S. stock index futures posted small gains Wednesday, overturning the earlier weaker tone after US consumer inflation came in as expected in October, suggesting the Federal Reserve could continue with its easing path. 

At 09:32 ET (14:32 GMT), the Dow Jones Industrial Average rose 40 points, or 0.1%, the S&P 500 index climbed 7 points, or 0.1%, and the NASDAQ Composite gained 25 points, or 0.1%. 

The main Wall Street indexes fell from record highs on Tuesday as investors locked in a measure of recent gains.  US CPI data in spotlight 

Data released earlier Wednesday showed that headline consumer prices rose 2.6% last month on an annualized basis, compared to 2.4% in September. Month-on-month, the figure came in at 0.2%, matching September's pace.

The "core" reading, stripping out more volatile items like food and fuel, rose 3.3% year-on-year and 0.3% on a monthly basis, in line with September.

These figures were all in line with expectations and soothed concerns after Minneapolis Fed President Neel Kashkari had warned on Tuesday that any surprises in inflation could see the Fed keep rates steady in December.

Richmond Fed President Thomas Barkin had also said the central bank was ready to respond to any renewed upward momentum in recently waning price growth.

Additionally, President-elect Donald Trump had pushed a protectionist stance towards trade and immigration during his campaign - policies that are expected to push up inflation in the long term.

The central bank cut rates by 25 bps last week, and is widely expected to cut rates once more when it next meets in December. Rivian soars on increased investment 

In the corporate sector, Rivian Automotive (NASDAQ:RIVN ) stock surged 11% after the electric vehicle maker and Volkswagen (ETR:VOWG ) announced an increased investment by the German automaker in a joint venture.

Spotify Technology (NYSE:SPOT ) rose 9% after it clocked strong subscriber growth for the September quarter while issuing a solid forecast for the year.

CAVA Group (NYSE:CAVA ) soared 16% after the Mediterranean fast-casual restaurant chain popped 14% after reporting a top- and bottom-line beat in the third quarter. 

Skyworks Solutions (NASDAQ:SWKS ) fell over 2% after the semiconductor company's forward guidance for the first quarter came in lighter than expectations.  Crude bounces back from losses 

Oil prices added to recent losses, trading close to their lowest in two weeks after the OPEC producer group downgraded its global oil demand growth forecasts.

By 09:32 ET, the Brent contract dropped 0.6% to $71.47 per barrel, while US crude futures (WTI) were 0.7% lower to $67.61 per barrel.

Both contracts had fallen by more than 5% at the start of the week.

In its monthly report on Tuesday, the Organization of the Petroleum Exporting Countries cut its forecast for world oil demand growth in both 2024 and 2025, mostly due to weakness in top oil importer China.

The International Energy Agency is set to publish its updated forecast on Thursday.

(Ambar Warrick contributed to this article.)

Source: Investing.com