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Easing inflation props up tech heavy Nasdaq

Consumer Price Index (CPI) up 4.9% in April against expectations of a 5% increase.

On Wednesday, the Nasdaq led the gains among Wall Street’s major indexes, as the latest data showed the Fed’s rapid interest rate hikes were producing results, with a slightly lower-than-expected increase in inflation last month. This caused U.S Treasury yields to fall, while the Nasdaq jumped by as much as 1.15%, reaching its highest intraday level in more than eight months. Stocks in large-cap technology companies, including Apple Inc. and Microsoft Corp., were up about 0.5% each.
According to the Labor Department’s Consumer Price Index (CPI), the month-over-month CPI in April rose 0.4%, compared to an increase of 0.1% in March. The CPI rose 4.9% in April from a year ago, but it was slightly lower than expectations of a 5% increase. This is good news for the Fed, as it tries to quell inflation. The Fed funds futures market now expects rates to remain unchanged at its June meeting, with a 14% chance of another 25 basis point hike.
According to Quincy Krosby, chief global strategist at LPL Financial in Charlotte, North Carolina, the Fed’s efforts to curb inflation are working, albeit more slowly than they hoped. There will be another report in June, in which we expect rent-related inflation to show definite signs of easing, which will contribute to lower headline inflation.
Rate-sensitive technology sector index rose 0.8%, while communication services rose 0.9%. Alphabet Inc gained 1.6% as it prepares to launch more artificial intelligence products to compete with Microsoft. After Occidental Petroleum Corp’s first-quarter earnings fell short of analysts’ expectations, its stock fell 2.1%. On the other hand, Livent Corp gained 4.2% after a $10.6 billion merger between Allkem Ltd and Livent Corp. Due to fewer bookings and lower average daily rates, Airbnb Inc lost 11.5% in the second quarter. Rivian Automotive jumped 13% after the EV maker beat first-quarter results estimates and reiterated its annual production forecast.

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