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U.S. stock futures jump after CPI data suggests inflation may be peaking

U.S. stock index futures rose Tuesday as investors focused on a report showing so-called core inflation slowing even as consumer prices rose by the fastest rate in 40 years.

What’s happening

S&P 500 futures
ES00,
+0.88%

gained 29 points, or 0.7%, to 4438

Nasdaq-100 futures
NQ00,
+1.58%

rose 174 points, or 1.2%, to 14174

On Monday, the Dow
DJIA,
-1.19%

fell 413 points, or 1.2%, while the S&P 500
SPX,
-1.69%

declined 1.7% and the Nasdaq Composite
COMP,
-2.18%

dropped 2.2%. The S&P 500 ended the session down 7% on the year.

What’s driving markets

U.S. consumer prices rose 1.2% in March, the Labor Department reported on Tuesday. Over the last 12 months, prices have gained 8.5%.

But the news that cheered investors was that core price growth slowed to 0.3%.

“March will likely be the peak for inflation as the indices will be lapping some strong year-ago readings starting in April, while gasoline prices have eased off lately,” said Katherine Judge, senior economist at CIBC Capital Markets.

The yield on the benchmark 10-year Treasury
TMUBMUSD10Y,
2.723%
,
which on Monday reached a three-year high, dropped to 2.73%.

The surge in yields is making stocks less attractive on a relative basis.

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