U.S. Stocks Rise as Inflation Slows More Than Forecast

U.S. Stocks Rise as Inflation Slows More Than Forecast

U.S. stocks rose, with the S&P 500 index advancing for a second day, after inflation data showed prices rose less than forecast in April. The benchmark gauge initially climbed on Tuesday and has since maintained its upward momentum for 2025, with investors showing optimism about the economy’s performance. The Dow Jones Industrial Average also advanced, while the Nasdaq Composite Index fell.

Key Developments

President Trump’s Plans on Syria Sanctions

President Donald Trump announced plans to lift sanctions on Syria that were imposed by his predecessor Joe Biden in response to Russian military aid to Damascus. This move is likely to have significant implications for international relations and global trade.

Microsoft Restructuring

Microsoft Corp., one of the largest companies in the S&P 500 index, will let go of approximately 3% of its workforce due to restructuring efforts at its LinkedIn unit and other areas of the business. The restructuring aims to reduce costs, improve efficiency, and streamline operations across various departments, including sales, marketing, product development, and customer service.

Coinbase’s Inclusion in S&P Index

Coinbase Global Inc., a cryptocurrency exchange operator, surged after it was announced that it would be included in an S&P index starting next month. This follows a challenging period for the company, which was removed from an exchange-traded fund last year after failing a spot price test by regulators.

UBS Wealth’s Downgrade

UBS Wealth recently downgraded its rating on U.S. stocks, citing concerns over high interest rates potentially weighing heavily on corporate profits. However, analysts remain optimistic about the prospects for U.S. stocks this year amid expectations for continued economic growth despite higher interest rates and inflation pressures.

Key Economic Events This Week

  • Monday: Consumer Price Index (CPI) data
  • Tuesday: Producer Price Index (PPI)
  • Wednesday: Federal Reserve Chairman Jerome Powell speaks at a conference hosted by Bloomberg
  • Thursday: Initial jobless claims data; Federal Reserve Bank of Philadelphia President Patrick Harker speaks at an event hosted by Bloomberg
  • Friday: Personal income and spending data; Chicago Purchasing Managers’ Index (PMI); University of Michigan consumer sentiment survey

Major Indexes Performance

  • S&P 500 futures rose 0.2% as of 8:45 a.m. New York time.
  • Dow Jones Industrial Average futures gained 0.1%.
  • Nasdaq Composite futures fell slightly.

Stocks Making Moves

  • Microsoft Corp.: Shares fell slightly before trading opened today following news of layoffs.
  • Coinbase Global Inc.: Shares surged more than 7% after the announcement of its inclusion in the S&P index.
  • UBS Group AG: Analysts downgraded the rating on the U.S. stock market but remain optimistic about prospects this year.

Inflation Data Overview

Prices increased 6.8% over the past twelve months through April, according to the latest CPI report. This represents a decrease from the 6.9% reported in March. Economists had expected prices to rise by 6.9% over the same period.

Summary

The stock market is responding positively to recent inflation data, with key companies like Microsoft and Coinbase making headlines due to restructuring and index inclusion, respectively. Despite some downgrades in stock ratings, analysts maintain a cautiously optimistic outlook for the U.S. economy.

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