Wall Street quickly turned from losses to gains early Friday after government data showed that inflation eased for the first time this year. Futures for the S&P 500 were 0.3% higher before the bell, while futures for the Dow Jones Industrial Average ticked up about 0.
2%. Markets cheered after the Fed's preferred measure of inflation showed prices cooled slightly last month, to a gain of 2.8% year over year, the same as March.
That same gauge accelerated in the first three months of 2024, disrupting what had been a steady decline and torching any notion that the Fed would start cutting rates early this year. The U.S.
central bank began hiking rates in March of 2022 in a bid to extinguish the four-decade high inflation that came as the economy rebounded from the COVID-19 recession of 2020. With inflation remaining stubbornly above the Fed’s 2% target level, Wall Street traders now expect just one rate cut this year. And that's far from certain, with investors placing the likelihood of a cut in November at 63%, down from 77% last week.
In early trading Friday, fashion retailer Gap Inc. jumped more than 25% after it posted nearly triple the per-share profit Wall Street was expecting. Ulta Beauty, the cosmetics retailer, also reported strong first-quarter profits, sending its shares up 10% before the bell.
On the losing side was the computer and server maker Dell, which saw its shares tumble nearly 17% before markets opened, even as its sales and profit came in ahead of Wall Str.
