US open: Stocks higher following CPI reading

dl exchange place wall st street pl new york city nyc ny nyse stock exchange dow jones sp nasdaq finance dollar dollars us usa united states of america — Exchange PlaceSharecast photo / Josh White

Wall Street stocks opened higher on Wednesday as market participants digested key inflation data scheduled from the Labor Department at the open.

As of 1520 BST, the Dow Jones Industrial Average was up 0.72% at 32,391.16 and the S&P 500 was 0.55% firmer at 4,023.03, while the Nasdaq Composite came out the gate 0.04% stronger at 11,742.17.

The Dow opened 230.42 points higher on Wednesday, reversing losses recorded in what was a mixed session for major indices a day earlier.

Wednesday's primary focus was news that the cost of living in the US dipped in April, but not by as much as anticipated amid continued rises in food prices throughout the month. According to the Department of Labor, in seasonally adjusted terms the annual rate of headline consumer price inflation slipped from 8.5% in March to 8.3% for April. However, in month-on-month terms, CPI rose by 0.3% after jumping by 1.2% during March.

For his part, Neil Wilson at Markets.com said: "Big simple binary response in the markets with yields up, dollar up, stock futures down, gold down. Bitcoin, now tightly correlated with the Nasdaq and risk in general, fell sharply too. That would be the great inflation hedge against money printing right?

"Does it really change what the Fed does? I don’t think one hot CPI print makes a summer [...] but the core reading has spooked lots of folks who had got the wrong side of this and had tried to second guess a softer reading than we got. Less peaking and more plateauing…higher for longer."

In other macro headlines, US mortgage applications rose 2% in the week ended 6 May, according to the Mortgage Bankers Association of America, up from the previous week's 2.5% increase.

Still to come, the Federal Government's April budget statement will be published at 1900 BST.

Turning to corporate news, Wendy's stock lost ground early on Wednesday after the fast-food giant reported both earnings and revenues that fell short of Wall Street estimates.

Beyond Meat, Walt Disney, and Sonos will release their latest quarterly figures after the close.

Reporting by Iain Gilbert at Sharecast.com

Dow Jones - Risers

Chevron Corp. (CVX) $165.45 2.91%
International Business Machines Corporation (CDI) (IBM) $132.32 2.47%
Caterpillar Inc. (CAT) $207.56 2.25%
Boeing Co. (BA) $135.79 2.13%
JP Morgan Chase & Co. (JPM) $121.24 1.98%
Dow Chemical Co. (DOW) $67.06 1.90%
Merck & Co. Inc. (MRK) $89.35 1.75%
Walt Disney Co. (DIS) $109.22 1.43%
Unitedhealth Group Inc. (UNH) $494.81 1.39%
Nike Inc. (NKE) $110.72 1.12%