Wall Street eyes higher open as inflation data meets estimates By Reuters

Wall Street eyes higher open as inflation data meets estimates By Reuters

© Reuters. FILE PHOTO: A street sign for Wall Street is seen in the financial district in New York, U.S., November 8, 2021. REUTERS/Brendan McDermid

By Devik Jain and Shreyashi Sanyal

(Reuters) – U.S. stock indexes were set for a stronger open on Friday after data showed consumer prices rose largely in line with estimates last month, taking some pressure off investors concerned about aggressive tightening of monetary policy.

The Labor Department’s report showed U.S. consumer prices accelerated 6.8% in the 12 months through November, its highest level since 1982, as the cost of goods and services rose broadly amid supply constraints.

The so-called core consumer price index (CPI) jumped 4.9% on a year-on-year basis after gaining 4.6% in October.

Economists polled by Reuters had forecast the CPI climbing 6.8% and core CPI rising 4.9%.

“The market is up because the numbers were pretty much in line with expectations and did not dramatically exceed as feared,” said Thomas Hayes, managing member at Great Hill Capital LLC in New York.

“The market has pretty much accepted the fact that (the Fed) will likely accelerate the tapering to end in March versus originally in June,” Hayes said.

Focus will be now on the U.S. central bank’s policy meeting next week for commentary about the path of interest rate hikes next year as well as the pace of bond purchases tapering.

A Reuters poll of economists predicted the Fed would raise rates by 25 basis points to 0.25-0.50% in the third quarter of next year, followed by another in the fourth quarter. However, most saw the risk that a hike comes even sooner.

Shares of Oracle Corp (NYSE:) jumped 13.6% in premarket trading after the enterprise software maker forecast an upbeat third-quarter outlook.

The dropped 5.2% from a record high hit on Nov. 22 as investors digested Jerome Powell’s renomination as the Fed’s chair, his hawkish commentary to tackle surging price pressures and the discovery of the Omicron coronavirus variant.

However, a positive update by Pfizer (NYSE:) and BioNTech’s on their vaccine offering some protection against the latest variant helped equities regain some ground.

South African scientists said on Friday they see no sign that the Omicron variant is causing more severe illness.

“The biggest concern to the market about the new variant is not how severe the new variant might be but what governments will do to tackle it,” said Francis Oh, managing director at Qraft AI, an AI-driven ETF issuer and asset management firm.

So far this week, the Nasdaq and the S&P advanced over 2.8% each and the Dow rallied 3.4%. The S&P is now down 1.6% from its all-time peak.

At 8:52 a.m. ET, were up 196 points, or 0.55%, were up 34.5 points, or 0.74%, and were up 137.25 points, or 0.85%.

Broadcom (NASDAQ:) Inc rose 6.9% as the semiconductor firm sees first-quarter revenue above Wall Street expectations and announced a $10 billion share buyback plan.

Meanwhile, the U.S. Senate on Thursday passed and sent to President Joe Biden the first of two bills needed to raise the federal government’s $28.9 trillion debt limit and avert an unprecedented default.

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