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U.S. equity futures nudged higher Thursday as investors looked to extend a springtime rally that has lifted all three major benchmarks to all-time highs following a muted inflation report and renewed bets on Federal Reserve rate cuts.
Stocks soared to record highs yesterday after Commerce Department showed headline inflation slowing to 3.4%, with the closely-tracked core rate easing to 3.6%, as price pressures eased for the first time this year.
A weaker-than-expected reading for April retail sales added to hopes that the economy, while still showing firm resilience, is cooling in a way that will bring tamer inflation while avoiding recession.
The Atlanta Fed’s GDPNow forecasting tool, in fact, suggests a current quarter growth rate of 3.8%, more than double the pace set over the first three months of the year, in an update that included the retail sales decline.
Traders are now pricing in a 72% chance of a September rate cut, according to the CME Group’s FedWatch, and the U.S. dollar index is trading at a one-month low of around 104.384 against a basket of its global peers.
Benchmark 10-year Treasury note yields, meanwhile, were marked 2 basis points lower in overnight trading at 4.336% while 2-year notes eased to 7.736%.
The Dow Jones Industrial Average is less than 100 points shy of the 40,000 point mark.
On Wall Street, investors are likely to focus on today’s release of weekly jobless claims data, which is expected to show another 220,000 Americans filed new unemployment benefit applications, as well as April housing starts figures due at 8:30 am Eastern time.
No fewer than five Fed officials are slated to make public comments today, as well, including the Atlanta Fed’s Rapahel Bostic, Cleveland Fed President Loretta Mester and Richmond Fed President Thomas Barkin.
Retail giant Walmart (WMT) will also publish its first quarter earnings update prior to the opening bell.
Related: Top analyst updates S&P 500 price target after April inflation surprise
Stocks on the move include Deere & Co (DE) , which slumped 6% after the industrial equipment maker lowered its 2024 profit forecast following a mixed set of second quarter earnings.
Cisco Systems (CSCO) , meanwhile, jumped 4.5% after the network equipment maker boosted its current quarter revenue forecast after a stronger-than-expected third quarter earnings report after the close of trading Wednesday.
Chubb (CB) surged 9.5% after a Securities & Exchange Commission filing from Berkshire Hathaway showed billionaire investor Warren Buffett built a $6.7 billion stake in the insurance group last quarter.
Heading into the start of the trading day, futures tied to the S&P 500, which is now up 12% for the year, are indicating a 3 point opening bell gain while those linked to the Dow Jones Industrial Average suggest a 30 point advance.
The tech-focused Nasdaq, which notched a 1.4% gain yesterday on the back of sliding Treasury yields and big upside moves for Nvidia (NVDA) , is priced for a 25 point bump.
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World stocks are also on pace for their longest winning streak since July, with the MSCI World index back at a fresh all-time high of 3,475.51 points following last night’s rally on Wall Street.
Europe’s Stoxx 600, however, was marked 0.16% lower in early Frankfurt trading as investors took profits from recent record highs, while Britain’s FTSE 100 slipped 0.29% in London.
Overnight in Asia, Japan’s Nikkei 225 jumped 1.39% to close at 38,920.26 points, the highest in more than a month, while the region-wide MSCI ex-Japan benchmark rose 1.49% into the close of trading.
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