Global stock markets and Wall Street futures were mixed Wednesday after a cooler reading on US inflation buoyed hopes the Federal Reserve will postpone a possible interest rate hike.
London and Frankfurt opened higher. Shanghai and Hong Kong declined while Tokyo advanced. Oil prices rose.
Wall Street's benchmark S&P 500 index hit a 14-month high after official data Tuesday showed US consumer inflation eased to 4 per cent over a year earlier in May from the previous month's 4.9 per cent. It was less than half last June's peak of 9.1 per cent but still double the Fed's 2 per cent target.
That reinforced hopes the Fed will avoid announcing another rate hike when its monthly meeting ends Wednesday. Two Fed board members have said the US central bank should put off a hike while it studies the impact of previous increases.
“The Fed will see this as a window of opportunity to pause,” Clifford Bennett of ACY Securities said in a report.
In early trading, the FTSE 100 in London rose 0.1 per cent to 7,602.64. The CAC 40 in Paris gained 0.2 per cent to 7,323.55 and the DAX in Frankfurt advanced 0.2 per cent to 16,272.07.
On Wall Street, the S&P 500 future was up 0.2 per cent. That for the Dow Jones Industrial Average was off 0.1 per cent.
On Tuesday, the S&P 500 rose 0.7 per cent. The Dow gained 0.4 per cent and the Nasdaq composite rallied 0.8 per cent.
In Asia, the Shanghai Composite Index lost 0.1 per cent to 3,228.98 while the Nikkei 225 in Tokyo rose 1.5 per cent to 33,502.42. The Hang Seng in Hong Kong lost less than 0.6 per cent to 19,408.42.
The Kospi in South Korea was off 0.7 per cent at 2,619.08 and Sydney's S&P-ASX 200 gained 0.3 per cent to 7,161.70.
India's Sensex added 0.2 per cent to 63,244.17. New Zealand declined while Singapore and Bangkok advanced.
Traders hope the US economy can avoid a recession even after the Fed raised its benchmark lending rate to a 16-year high to extinguish surging inflation by cooling business activity.
Tuesday's inflation reading prompted traders to increase bets for the Fed to announce no change to interest rates. That would be the first monthly meeting in more than a year without a rate hike.
Previous rate hikes led to a contraction in manufacturing and three high-profile bank failures.
Nvidia gained 3.9 per cent on Tuesday and was the strongest force pushing up the S&P 500, along with other technology stocks. Tech and other high-growth stocks are seen as some of the biggest beneficiaries if the Fed eases off rate hikes.
Nvidia has gotten an added boost from Wall Street's enthusiasm for artificial intelligence.
On Tuesday, four out of five stocks in the S&P 500 rose.
Raw-material producers and industrial companies had some of the biggest gains amid hopes for a resilient economy. Miner Freeport-McMoRan rose 5.3 per cent.
Many traders expect the Fed to resume raising rates in July even if it holds steady this week.
Zions Bancorp. fell 1.6 per cent after it appeared to cut its forecast for upcoming net interest income in an investor presentation.
Many investors came into this year predicting a recession would hit in the third quarter, which is two weeks away. Yet a resilient job market has propped up economic activity.
In energy markets, benchmark US crude rose 42 cents to USD 69.84 per barrel in electronic trading on the New York Mercantile Exchange. The contract rose USD 2.30 on Tuesday to USD 69.42. Brent crude, the price basis for international oil trading, added 57 cents to USD 4.86 per barrel in London. It gained $2.45 the previous session to USD 74.29.
The dollar declined to 139.90 yen from Tuesday's 140.29 yen. The euro gained to USD 1.0796 from USD 1.0790.
