US pre-open: Futures little changed as major indices hit record highs

(Sharecast News) - Wall Street futures were slightly higher ahead of the bell on Thursday as cooler-than-expected inflation data helped push major indices to fresh record highs. As of 1245 BST, Dow Jones futures were up 0.05%, while S&P 500 and Nasdaq-100 futures had the indices opening 0.08% and 0.17% firmer, respectively.

The Dow closed 349.89 points higher on Wednesday following a modest cooling in the Bureau of Labor Statistics' consumer price index report in April.

In fact, all three major averages closed at record highs as last month's CPI, a broad measure of how much goods and services cost at the cash register, increased 0.3% month-on-month, slightly below estimates for a reading of 0.4%. However, consumer prices grew 3.4% year-on-year, well and truly above the Federal Reserve's 2% target.

Trade Nation's David Morrison said: "US stock indices soared yesterday in a move which took both the S&P 500 and NASDAQ 100 to fresh record closing highs. The Dow is currently within a few points of its own all-time high as the three US majors have added to gains this morning. The mid-cap domestically-focused Russell 2000 was also up sharply yesterday, but has pulled back a touch this morning. It remains around 14% below its own all-time high from back in November 2021. The gains followed the release of a clutch of CPI data which indicated a modest softening in consumer inflation from the prior month.

"All in all, this appears to be an outsized reaction to the data. It suggests that there was widespread relief that the CPI data didn't come in above expectations. But the reaction also suggests that investors are suffering from a large dose of FOMO, and there are concerns that we could be in the process of a blow-off top with echoes of the moves seen back in early 2020. That was followed by a devastating sell-off triggered by the coronavirus panic which engulfed the world. So the comparison with today only goes so far. But it could be argued that the air up here is quite thin. And in the same way that there's no obvious catalyst for a decline, it's hard to discern what could help to lift equities much higher from here."

On the macro front, building permits, housing starts, jobless claims, and the Philadelphia Fed's May manufacturing survey will be published at 1330 BST, while April industrial production and capacity utilisation figures will follow at 1415 BST.

In the corporate space, Cisco traded higher in extended trading on the back of positive results, while retail giant Walmart posted quarterly numbers that came in ahead of estimates thanks to an increased percentage of high-income shoppers and a jump in online sales.

Reporting by Iain Gilbert at Sharecast.com