The U.S. Labor Department said on Wednesday that the consumer price index (CPI) rose last month, down from 6% in February and the smallest gain since May 2021. Prices households pay for food and housing rose, while gasoline and used car prices fell.
On Thursday, the S&P 500 rose 1.3 percent and the Dow rose 1.1 percent. The Nasdaq rose 2 percent to 12,166.27. In early trade, London’s FTSE 100 rose 0.2% to 7,862.09. Frankfurt’s DAX rose 0.2 percent to 7,843.38 and Paris’ CAC 40 rose 0.2 percent to 7,497.61.
In Asia, China’s exports rose 14.8% in March from a year earlier, rebounding from declines in January and February, with the Shanghai Composite closing up 0.6% at 3,338.15. Tokyo’s Nikkei 225 rose 1.2 percent to 28,493.47. Hong Kong’s Hang Seng rose 0.5 percent to 20,438.81. Seoul’s Kospi rose 0.4% to 2,571.49. Sydney’s S&P-ASX 200 index rose 0.5 percent to 7,361.60.
Government data on Thursday showed prices paid to U.S. producers rose 2.7% from a year earlier, the smallest increase in more than two years. A separate report showed slightly more U.S. workers filed for unemployment benefits last week than expected, but the labor market remained resilient.
Fed officials have said they expect at least one more rate hike this year, with the benchmark rate remaining elevated through early 2024. Minutes from the Fed’s March 21-22 meeting showed members agreed that the next rate hike would be 0.25 percentage point, not 0.5 percentage point. Some traders speculated that the Fed may leave its benchmark lending rate unchanged at its May meeting, while others expect the U.S. central bank to begin cutting rates as early as mid-year to boost the economy.
Fears of banks collapsing under the pressure of higher interest rates were stoked following two high-profile bank failures in the United States and Switzerland. The Fed minutes said its economists believed the weakness might lead to a mild recession later this year.
In energy markets, benchmark U.S. crude oil rose 3 cents to $82.19 a barrel in electronic trading on the New York Mercantile Exchange. Brent crude, the price basis for international oil trades, rose 1 cent to $86.10 a barrel in London.