Wall St set to kick off week higher; U.S. inflation in focus

Following a tumultuous week, Wall Street was expected to open higher on Monday, with investors looking ahead to a highly anticipated U.S. inflation report due later in the week, which could put the market’s strong comeback this year to the test.

On Friday, the major stock indexes finished the week lower, with some investors taking profits after months of gains owing to concerns about economic data, mixed results, and rising Treasury yields.

The benchmark S&P 500 has gained 16.6% year to date, powered by optimism surrounding artificial intelligence and predictions for a soft landing for the world’s largest economy.

Bank of America and JPMorgan both dropped their estimates for a US recession last week.

After an employment report on Friday re-ignited fears that the Fed would keep rates higher for longer, consumer pricing data in the United States on Thursday could provide clues to the Federal Reserve’s monetary policy direction.

According to a New York Times story, New York Fed President John Williams, a voting member this year, believes interest rates will begin to fall in early 2024.

Investors will also be looking for comments from Fed Board Governor Michelle Bowman, who warned on Saturday that the Fed is likely to need to hike interest rates further to reduce inflation.