– U.S. stock index futures rose in evening deals on Wednesday, extending gains after signs of a mild decline in consumer inflation drove Wall Street to record highs on hopes of interest rate cuts. 

Wall Street rallied, while the dollar and Treasury yields fell after slightly softer-than-expected consumer price index data saw traders grow more convinced that the Federal Reserve will begin cutting interest rates in September. 

These gains spilled over into after-hours trading, with up 0.1% at 5,338.75 points. rose 0.2% to 18,724.50 points, while rose 0.1% to 40,092.0 points by 20:17 ET (00:17 GMT).

Cooling CPI boosts September rate cut bets

Data on Wednesday showed inflation grew at a slightly softer-than-expected month-on-month rate in April, while , which excludes volatile food and energy prices, fell to an annualized 3.6% from 3.8% in March.

While inflation did ease in April, it still remained well above the Fed’s 2% annual target. It also came on the heels of a stronger-than-expected print on Tuesday. 

Still, investors were seen increasing expectations for a 25 basis point rate cut in September, expectations for which now stood at a 53.8% probability, according to the . This was up from the 49.0% chance seen last week. 

Wall Street rallied on the prospect of interest rate cuts, especially as a slew of Fed officials signaled that inflation will be a key consideration for cutting rates.

Weak data for April, released on Wednesday, also pushed up hopes that inflation will cool in the coming months. 

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Technology stocks were also the biggest benefactors of this trade.

The rose 1.2% to 5,308.15 points, while the rose 1.4% to 16,742.39 points on Wednesday. The rose 0.9% to 39,908.0 points, with all three benchmarks closing at record highs.

Meme stock rally cools as GME, AMC tumble 

A two-day rally in the so-called meme stocks ran out of steam on Wednesday, with GameStop Corp (NYSE:) and AMC Entertainment Holdings Inc (NYSE:) both sliding around 20% during the session. The two saw extended losses in aftermarket trade, falling 9% and 6.4%, respectively.

A rally in meme stocks had been triggered chiefly by the social media account of Keith Gill, whose “Roaringkitty” handle on X began posting after a nearly three year absence. Gill was a figurehead of the meme stock rally in 2021, particularly his posts on Gamestop. 

Aftermarket movers: Chubb hits record high as Berkshire takes stake

Shares of insurer Chubb Ltd (NYSE:) surged over 7% to a record high in after-hours trade, after Warren Buffett’s Berkshire Hathaway Inc (NYSE:) revealed it had taken a $6.72 billion stake in the firm.

Cisco Systems Inc (NASDAQ:) rose nearly 5% after the communications equipment maker clocked stronger-than-expected quarterly earnings.

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