Stock futures rose Tuesday after another report signaled that inflation could be slowing, reigniting a rally in stocks.
Futures tied to the Dow Jones Industrial Average rose 412 points, or 1.2%. S&P 500 futures added nearly 2% and Nasdaq-100 futures gained 3%.
The produce price index, a measure of wholesale inflation, rose 0.2% for the month, versus the consensus estimate for a 0.4% increase from Dow Jones.
Walmart shares jumped in premarket tradingafter the company beat Wall Street earnings and revenue estimates and boosted full-year guidance. Home Depot reported strong results too but kept guidance in place for the full-year. Its shares dipped slightly.
The producer price index, which measures wholesale inflation, is set for release at 8:30 a.m. ET. The report comes after the latest consumer price index data showed signs of inflationary pressure abating last month, thus sparking a sharp rally to end trading last week.
“After last week’s CPI undershoot prompted a huge equity rally & reversal in the Dollar, the critical topic for markets this week will be the Fed’s reaction,” wrote Huw Roberts, head of analytics at Quant Insight, in a Monday note.
Federal Reserve governors Christopher Waller and Lael Brainard spoke Sunday and Monday, respectively, about the potential future path of monetary policy. Waller said the market was overly optimistic and should brace for higher rates, while Brainard said the central bank could ease off rate increases.
Philadelphia Fed President Patrick Harker, Fed Governor Lisa Cook and Fed Vice Chair for Supervision Michael Barr are set to speak Tuesday.
Elsewhere, Taiwan Semiconductor, Louisiana-Pacific and Paramount jumped after regulatory filings showed that Warren Buffett’s Berkshire Hathawayhad bought new positions in the first two, and raised its stake in the last.
Earnings season continues this week with retail reports from Target, Lowe’s, Bath and Body Works, Macy’s, Kohl’s and Foot Locker on deck.