U.S. Stocks May See Further Upside Following Encouraging Inflation Data

(RTTNews) - Following the release of encouraging producer price inflation data, stocks are likely to move to the upside in early trading on Wednesday. The major index futures are currently pointing to a higher open for the markets, with the S&P 500 futures up by 0.5 percent.

The futures advanced following the release of a Labor Department report unexpectedly showing a modest decrease by producer prices in the U.S. in the month of August.

The Labor Department said its producer price index for final demand edged down by 0.1 percent in August after climbing by a downwardly revised 0.7 percent in July.

The dip surprised economists, who had expected producer prices to rise by 0.3 percent compared to the 0.9 percent jump originally reported for the previous month.

The report also said the annual rate of producer price growth slowed to 2.6 percent in August from a downwardly revised 3.1 percent in July.

Economists had expected the annual rate of producer price growth to remain unchanged compared to the 3.3 percent surge originally reported for the previous month.

The data is likely to add to recent optimism about the Federal Reserve lowering interest rates by at least a quarter point at its monetary policy meeting next week.

The markets may also benefit from a surge by shares of Oracle (ORCL), with the software company soaring by 32.0 percent in pre-market trading.

The spike by Oracle comes after the company reported slightly weaker than expected fiscal first quarter earnings but said it expects cloud infrastructure revenue to skyrocket to $144 billion in fiscal 2030 from $10.3 billion in fiscal 2025.

Buying interest may be somewhat subdued, however, as traders look ahead to the release of the Labor Department's report on consumer price inflation on Thursday.

After showing a lack of direction early in the session, stocks moved mostly higher over the course of the trading day on Tuesday. The major averages added to the gains posted during Monday's session, reaching new record closing highs.

The major averages pulled back off their highs going into the close but remained in positive territory. The Dow increased 196.39 points or 0.4 percent to 45,711.34, the Nasdaq climbed 80.79 points or 0.4 percent to 21,879.49 and the S&P 500 rose 17.46 points or 0.3 percent to 6,512.61.

In overseas trading, stock markets across the Asia-Pacific region moved mostly higher during trading on Wednesday. Japan's Nikkei 225 Index advanced by 0.9 percent, while Hong Kong's Hang Seng Index jumped by 1.0 percent.

The major European markets have also moved to the upside on the day. While the French CAC 40 Index is up by 0.7 percent, the U.K.'s FTSE 100 Index is up by 0.2 percent and the German DAX Index is up by 0.1 percent.

In commodities trading, crude oil futures are jumping $0.76 to $63.39 a barrel after rising $0.37 to $62.63 a barrel on Tuesday. Meanwhile, an ounce of gold is trading at $3,689.20, up $7 compared to the previous session's close of $3,682.20. On Tuesday, gold inched up $4.80.

On the currency front, the U.S. dollar is trading at 147.37 yen compared to the 147.41 yen it fetched at the close of New York trading on Tuesday. Against the euro, the dollar is trading at $1.1709 compared to yesterday's $1.1708.