New Telegraph-Admin 
U.S. stocks rebounded from a steep sell-off yesterday as fresh economic data rekindled hopes that inflation remains in a cooling trend. Interest rate-sensitive megacaps boosted the tech-heavy Nasdaq sharply higher, while the S&P 500 and the Dow were modestly lower.
The Producer Prices index (PPI) came in cooler than expected, supporting the narrative that price growth is still cooling. On Wednesday, hotter than-expected CPI data sent stocks sharply lower and benchmark Treasury yields to their highest level since November. The report doused hopes that the central bank could implement as many as three rate cuts before year-end, possibly starting as soon as its June policy meeting. “There’ been a lot of trepidation in the market, even heading into the CPI reading yesterday,” Joseph Sroka, chief investment officer at NovaPoint in Atlanta.
“There was probably an equal amount of trepidation coming into today for the PPI report, which was obviously more in line with expectations,” he added. While the PPI data was more encouraging, the data did indicate that inflation’s journey down toward the central bank’s annual two per cent target might be too meandering for the Fed. John Williams, President of the Federal Reserve Bank of New York, said “there’s no clear need to adjust monetary policy in the very near term.”
Richmond Fed President Thomas Barkin cited the latest inflation data, saying the central bank is not yet confident pricing pressures will continue to ease. “Investors are starting to absorb the possibility that maybe inflation’s could linger just a little bit longer and the Fed’s going to continue to remain patient, which is their big word right now,”
Sroka added. Investors now switch their focus to first quarter earnings season, with results from three major U.S. banks – JPMorgan Chase & Co (JPM.N), Citigroup Inc (C.N), and Wells Fargo & Co (WFC.N)-due Friday morning.
