US stocks opened higher on Wednesday as investors digested hotter-than-expected wholesale inflation data and looked to the release of Federal Reserve minutes for insights into the central bank’s thinking on interest rates. The Dow Jones Industrial Average, S&P 500, and Nasdaq Composite all saw gains early in the trading session.
Last month, US wholesale prices rose at the fastest pace since April, with the producer price index climbing 2.2% from a year earlier, surpassing the expected 1.6% gain. This suggests that inflationary pressures persist despite the Fed’s previous interest rate hikes. Investors are eagerly awaiting the release of the Fed’s minutes from its last meeting, which are expected to provide more clarity on its future policy decisions.
Meanwhile, Treasury yields are retreating from recent highs reached during a bond sell-off triggered by escalating tensions in the Middle East. Analysts caution that bonds may not be out of the woods just yet, as there is no weak economic data or solid reason for yields to continue falling.
Oil prices continued to slide, potentially alleviating some of the inflationary pressures. The impact of the Middle East conflict on oil supply is appearing to be contained. Crude oil futures dropped 1.2%, while Brent crude futures were down 1.1%.
In individual stock news, energy giant Exxon Mobil agreed to acquire shale rival Pioneer Natural Resources in an all-stock deal valued at nearly $60 billion. Shares of Exxon Mobil slipped 4%, while Pioneer shares gained less than 1%. German sandal maker Birkenstock is also making its debut on the NYSE following its initial public offering.
Overall, investors are closely watching inflation data, bond yields, and geopolitical tensions as they await further insight into the Fed’s interest rate decisions.
Sources:
US stocks gained at the open on Wednesday (CNBC)
Producer prices edge higher amid energy, food costs (Yahoo Finance)
Stocks open slightly higher (Yahoo Finance)
Stock futures rise with Fed’s rate path in focus (Yahoo Finance)