[Stocks News] Stocks Open Higher Following Wall St Slump, as Investors Update Rate Bets
Stocks News, U.S. stocks rebound in early trading amid recalibrated interest rate bets following a stronger-than-expected U.S. inflation reading.
New York, February 14, 2024 – U.S. stocks climbed in early trading on Wednesday, showcasing a modest recovery from the previous session’s sell-off on Wall Street. Investors, grappling with a stronger-than-anticipated U.S. inflation reading, recalibrated their interest rate bets, driving market sentiment amid evolving economic dynamics.
As of 09:38 ET (14:38 GMT), the benchmark S&P 500 had risen by 0.4%, the tech-heavy Nasdaq Composite had added 0.6%, and the blue-chip Dow Jones Industrial Average had inched up by 0.1%.
Tuesday’s downturn across New York’s main indices followed data revealing that overall U.S. consumer price gains outpaced economists’ predictions in January. This revelation pointed to persistent inflationary pressures, diminishing hopes for an imminent interest rate cut by the Federal Reserve.
Analysts at ING labeled the release “uncomfortable reading” for the Fed, which has been fervently combating inflation through aggressive tightening measures. Despite the Fed’s efforts, inflation remains stubbornly above its stated 2% target. Consequently, markets have adjusted their expectations, virtually erasing previous bets for a 25 basis point reduction at the Fed’s March policy meeting and reducing the likelihood of one in May.
In individual stock movements on Wednesday, Lyft (NASDAQ: LYFT) shares experienced a surge of more than 30%, even after retracting a significant portion of their premarket gains due to an error in its margin outlook. Chief Financial Officer Erin Brewer disclosed that the company had inadvertently announced an excessively high annual margin growth forecast. The corrected projection for 2024 indicated a more modest increase of 50 basis points, contrary to the previously stated expansion of 500 basis points. Nonetheless, investors remained optimistic about the ride-sharing firm following its positive free cash flow outlook for the current fiscal period.
Conversely, shares in Airbnb (NASDAQ: ABNB) declined after the travel accommodation app projected a slowdown in booking rates for the current quarter. In a shareholder letter, the company attributed the deceleration to a challenging year-on-year comparison that would impact the growth rate of nights booked in the first quarter compared to the prior three-month period.
Kraft Heinz Co (NASDAQ: KHC) reported fourth-quarter net sales that fell short of expectations, attributing the downturn to headwinds from recent price hikes dampening demand. Consequently, shares in the packaged food group experienced a decline.
In the commodities market, oil prices surged as traders assessed a robust demand forecast from the OPEC producer group. Brent oil futures expiring in April rose by 0.9% to $83.52 a barrel, while West Texas Intermediate crude futures advanced by 1.1% to $78.72 per barrel by 09:44 ET.
OPEC, in its monthly report released on Tuesday, maintained its outlook for global crude demand, citing persistent geopolitical tensions in the Middle East and Russia as supportive factors. These tensions, coupled with concerns over potentially prolonged higher U.S. interest rates, which could hamper economic activity and oil demand in the coming months, buoyed oil prices.
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