Inflation rose again in February, keeping the Federal Reserve on course to wait at least until the summer before starting to lower interest rates.
The consumer price index, a broad measure of goods and services costs, increased 0.4% for the month and 3.2% from a year ago, the Labor Department’s Bureau of Labor Statistics reported Tuesday. The monthly gain was in line with expectations, but the annual rate was slightly ahead of the 3.1% forecast from the Dow Jones consensus.
Excluding volatile food and energy prices, core CPI increased 0.4% on the month and was up 3.8% on the year. Both were one-tenth of a percentage point higher than forecast.
Market Snapshot
At 08:38 a.m. ET, Dow e-minis were up 84 points, or 0.21%, S&P 500 e-minis were up 27 points, or 0.52%, and Nasdaq 100 e-minis rose 135 points, or 0.74%.
Pre-Market Movers
Oracle reported fiscal third-quarter adjusted earnings of $1.41 a share as revenue rose 7% to $13.28 billion. Analysts had been expecting the enterprise software company to post a profit in the period of $1.38 a share on revenue of $13.3 billion. The company’s cloud infrastructure business rose 49% to $1.8 billion. CEO Safra Catz said large new cloud infrastructure contracts signed during the quarter “drove Oracle’s total remaining performance obligations up 29% to over $80 billion— an all-time record.” Oracle said it expects cloud revenue to rise as much as 24% in the fourth quarter. Oracle shares jumped 13%.
Nvidia was rising 1.5%. The strong market for the company’s graphics-processing units was emphasized in Oracle’s earnings report. Oracle recently signed a new cloud-computing infrastructure deal with Nvidia and said it plans to boost capital spending in the next fiscal year, suggesting sustained demand for AI chips.
Acadia Pharmaceuticals was falling 16% after the company’s drug pimavanserin for the treatment of negative symptoms of schizophrenia didn’t demonstrate a statistically significant improvement over a placebo. “We will continue to analyze these data with our scientific advisors, but we do not intend to conduct any further clinical trials with pimavanserin,” said Acadia CEO Steve Davis.
Shares of Archer Daniels Midland rose 3.6% after the agricultural company said it expects fiscal-year adjusted earnings of $5.25 to $6.25 a share versus analysts’ estimates of $5.41, and its board authorized an additional $2 billion to its share buyback program. The company’s fourth-quarter earnings missed forecasts.
On Holding was falling 17% after the Swiss footwear and apparel maker issued a sales forecast for the fiscal year that missed Wall Street estimates. The company said it expects sales of $2.57 billion, below analysts’ expectations of $2.64 billion. On Holding said “negative foreign exchange impacts are expected to be more pronounced” in the first half of the year.
Vail Resorts reported fiscal second-quarter earnings and revenue that missed analysts’ estimates with the ski resort operator citing “unfavorable conditions” and reduced snowfall across its North American resorts. The company also reduced its fiscal-year guidance, saying it now expects earnings of between $270 million and $325 million, down from a prior forecast of $316 million to $394 million. The stock fell 5.6%.
Asana, the work management software company, reported a fiscal fourth-quarter loss of 4 cents a share, narrower than analysts’ expectations. Asana said it expects an adjusted loss in the first quarter of 8 cents to 9 cents a share, in line with estimates, and revenue of $168 million to $169 million, up 10% to 11% from a year earlier. The stock fell 2.6%.
Advance Auto Parts said it appointed three new directors to its board and reached cooperation agreements with activist investors Third Point and Saddle Point Management. Third Point has a stake in the auto parts retailer, The Wall Street Journal reported Monday. Dan Loeb’s Third Point approached Advance Auto Parts earlier this year with the primary goal of adding directors with experience in the industry to its board, the Journal said, citing people familiar with the matter. The stock was up 1.3% in premarket trading. Coming into Tuesday, it has risen 24% in 2024 but has declined 38% over the past 12 months.
Fiscal third-quarter earnings at Casey’s General Stores fell from a year earlier. The company said the drop was “primarily due to a strong fuel margin comparison in the prior year” that lapped a one-time operating expense benefit of $15 million in the prior year, and “higher operating expenses due to operating 167 additional stores.” Shares of Casey’s declined 1.6%.
Kohl’s reported fourth-quarter earnings that beat analysts’ estimates and the department-store company announced a partnership with Babies “R” Us. Then stock fell slightly.
Market News
Trump asked Elon Musk if he wanted to buy Truth Social
Donald Trump asked billionaire Tesla CEO Elon Musk if he was interested in buying the ex-president's social media platform, Truth Social.
The approach by Trump last summer didn't lead to a deal, according to a Washington Post report on Tuesday, which cited people familiar with the matter. Musk bought Truth Social rival Twitter, which has since changed its name to X, in 2022 for $44 billion.
Southwest Plans to Cut 2024 Capacity, Citing Boeing Challenges
Southwest Airlines Co. plans to cut capacity and rejigger schedules, citing Boeing Co.’s “continued challenges” and a drop in full-year Boeing Max deliveries to 46 from 79.
Due to capacity reductions, the company has halted hiring for pilots, flight attendants and other workers and plans to end the year with lower headcount, Southwest said in a filing on Tuesday. The company expects a net loss in the first quarter 2024, with a return to profitability in March.