Wall Street stocks rose on Monday as investors awaited the release of key US inflation data that is likely to influence policymakers at the Federal Reserve when they set interest rates this week.
Wall Street’s benchmark S&P 500 rose 0.3 per cent, consolidating its move last week into bull market territory, while the tech-heavy Nasdaq Composite added 0.2 per cent.
Stocks were buoyed by bets that the Federal Reserve will resist raising interest rates when it meets on Tuesday and Wednesday, marking the first pause in the central bank’s 14-month campaign to tame inflation.
“With signs that the economy is shuffling off into a potential recession, the expectation is that [Fed policymakers] are likely to keep rates on hold,” said Susannah Streeter, head of money and markets at Hargreaves Lansdown.
The latest US consumer price index report is published on Tuesday. It is expected to show that headline inflation slowed to 4.1 per cent year on year in May, according to economists surveyed by Reuters.
The reading would mark a significant improvement from the 4.9 per cent rate in April, after a 5 per cent figure in March, and would give the Fed more room to pause.
“Any deviation from the forecast path is likely to cause a jolt of volatility on markets,” said Streeter.
On the eastern side of the Atlantic, economists are still convinced that the European Central Bank will raise its deposit rate by another quarter percentage point when policymakers meet on Thursday.
Europe’s region-wide Stoxx 600 rose 0.3 per cent, while France’s Cac 40 added 0.6 per cent and Germany’s Dax advanced 0.8 per cent.
London’s FTSE 100 rose 0.1 per cent, but was held back by a 0.8 per cent fall in its crucial energy sector. The shares of UK-listed BP and Shell both lost about 1 per cent.
The moves came as oil prices dropped on Monday after Goldman Sachs revised its end-of-year price estimate for Brent crude, the international benchmark, to $86 from $95, following two previous downward revisions in the past six months.
Investor concerns over demand for the fuel grew in the wake of lukewarm data on Chinese exports and producer price deflation, pointing to weak demand both outside and inside the world’s second-largest economy.
Brent fell 2.5 per cent to $72.93, while US marker West Texas Intermediate fell 3 per cent to $68.03.
Asian equities rose, with China’s CSI 300 up 0.2 per cent, while Hong Kong Hang Seng index added 0.1 per cent and Japan’s Topix advanced 0.7 per cent.
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