Despite Rising Headline Inflation, Stocks In the United States Open Higher

Futures in the United States

At 34507, the Dow futures are up 0.65 percent.

S&P 500 futures are up 1.22 percent at 4463.

Futures on the Nasdaq 14262 is up 1.8 percent.

In Europe, the FTSE is down 0.3% at 7635.

Dax is up 0.01% at 14250, while the Euro Stoxx is up 0.4 percent at 3856.

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Stocks jump, as core inflation falls short of expectations.

Despite higher-than-expected US headline inflation, US equities are on the rise. The Nasdaq is outperforming, recouping some of the previous session's 2 percent losses.

In March, the US CPI increased to 8.5 percent YoY, up from 7.9 percent in February and ahead of the forecast of 8.3 percent. Core inflation was somewhat lower than expected, at 6.5 percent year over year, up from 6.4 percent in February but below the 6.6 percent forecast.

The market has grasped and is responding to the weaker core inflation rate. The dollar has dropped from session highs, while equities have risen. Given the high level of inflation, this seems to be an overreaction by the market. Still, the market was gearing itself for high inflation, so a weaker core report is merely taking the sting out of the dollar, prompting some profit-taking.

The Fed's attitude is unlikely to have altered as a result of the data. May is projected to see a hefty rate rise of 0.5 percent, and the central bank will begin shrinking its balance sheet at a pace of $95 billion per month.

After the US banned Russian oil imports in response to Russia's invasion of Ukraine, fuel costs became once again the key cause of inflation.

There will be no more high-impacting US data in the near future. Following the release, all eyes will be on Fed speakers. The Federal Reserve's Governor, Lael Brainard, is scheduled to speak soon.

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Where does the S&P 500 go from here?

The S&P 500 retreated from 4630, dropping below the 100 and 50 day moving averages to a low of 4387, when buyers re-entered to boost the market upward, back over 4400. Although the bearish crossing on the MACD leads to additional losses, the protracted lower wick implies that the price failed to gain acceptance at the lower level. Sellers will need to break through today's low of 4387 in order to push lower towards 4330, a level that has served as both support and resistance in recent months. For additional advances towards 4630, buyers would be waiting for a move over the 100 sma near 4500.

Markets for foreign exchange The dollar is falling, while the euro is rising.

Following the inflation report, the dollar has weakened, indicating satisfaction that the print was not significantly higher and as investors respond to the weaker core inflation print.

The EUR/USD trades higher as the ZEW index rises. The mood in Germany was split when it came to the economy. In April, economic confidence fell to -41, down from -39.9 in March, but still much higher than the -48 forecast. CPI verified 7.3 percent YoY in March, up from 5.1 percent in February, while PPI increased to 22.6 percent, up from 16.6 percent in February.

The GBP/USD exchange rate is rising, indicating that the UK employment market is improving. The unemployment rate has dropped to 3.8 percent, which is lower than it was before the outbreak.

Wages increased by 5.4 percent in the three months leading up to February, although this was still below the 6.2 percent inflation rate. Even so, it will put pressure on the Bank of England to raise interest rates.

EUR/USD +0.04 percent at 1.0850 GBP/USD +0.1 percent at 1.3011

Oil prices rise as OPEC issues a warning about Russian supplies.

Oil prices have risen as Shanghai has eased certain COVID restrictions, alleviating fears about Chinese consumption, while OPEC has cautioned about Russian supply losses.

In certain parts of Shanghai, the city's lockdown restrictions have been eased. The action has calmed demand concerns that had been dragging the price down in previous sessions.

Separately, OPEC cautioned that in the case of sanctions or forced exports, it would be impossible to replace Russia's 7 million barrels per day supply. While the United Kingdom and the United States have blocked Russian oil imports, the EU is split on the issue, considering its reliance on Russian energy.