The Dow Jones Industrial Average Index (DJIA) futures edged higher on Thursday after the release of strong US inflation data. The Dow Jones futures were up by more than 0.35% while S&P 500 and Nasdaq’s futures also rose by more than 0.20% each.
US Inflation Data
According to the US Bureau of Labor Statistics, the United States recorded strong economic data in May. US Core Consumer Price Index (CPI) rose 0.7% MoM in May surpassing the estimate forecast of 0.4%. This included all items except food and energy. The index was however, below April’s 0.9% rise.
US Core Consumer Price Index rose 3.8% YoY from the previous 3.0%. This was stronger than the estimated 3.4% forecast. US Headline CPI rose 0.6% MoM in May dropping from April’s 0.8% but stronger than the 0.4% prediction.
The Dow Jones Index will react to the strong US inflation growth. It is expected to record large gains as the economy heads towards recovery.
Used cars and trucks index rose sharply by 7.3% in May. Food and energy index remained unchanged from the previous gains in April. Energy index recorded a decline in the gasoline index which offset the gains in the gas and electricity indexes.
Household furnishings and operations, new vehicles, clothing, and airline fares continued to increase with the easing of lockdown restrictions. Medical care slightly fell in May with the vaccinations’ rollout.
Core consumer price index rose 5.0% for the last 12 months ending May. This has been a continuous uptrend since January and the fastest growth rate since August 2008. The core CPI excluding food and energy rose 3.8% over the last 12 months.
US Initial Jobless claims came in at 376,000 from the previous 405,000. Despite the decrease, this was bearish for the USD since the figures were weaker than the estimated forecast of 370,000.
The government bond yields moved higher while the 10-year Treasury note last traded near 1.52%. Investors are closely watching the Federal Reserve to gauge whether the monetary policy will be tightened further amid inflation in the country.
Dow Jones Movers
Among the best performers in the Dow Jones index include Chevron Corp, Boeing Corp and Merck & Co Inc. Boeing Co gained more than 2.0% in the stock market after talks about massive 737 Max jets orders. Merck rose by more than 2.2% after US signed a $1.2 billion deal with the company for Covid-19 vaccines. Chevron Corp gained in the stock market after strong economic numbers in US.
Some of the companies that lagged in the index include Nike Inc, American Express Co, and JPMorgan Chase& Co. The companies opened the market on a low note after US inflation data.