Market Analysis

On Wednesday, global stocks saw a rise while the dollar took a step back following a report on U.S. wholesale inflation, adding tension to trading before the release of the consumer price report, which could influence the Federal Reserve's decisions on interest rates.

The excitement around meme stocks continued for a third day, with AMC and GameStop shares surging over 25% in premarket trading.

The MSCI All-World share index hit a new high, showing a 0.15% increase for the day and an 8.3% gain for 2024 so far.

Investor activity remained cautious ahead of the U.S. consumer price index release later in the day, resulting in relatively subdued market movements.

In Europe, the STOXX index climbed 0.3%, mainly supported by healthcare stocks, while U.S. stock futures indicated a more restrained start on Wall Street compared to the previous day's meme-stock rally.

This surge in meme stocks has drawn comparisons to the frenzy seen in early 2021, fueled by retail traders and social media, which inflated the value of stocks that were heavily shorted by large investors.

Some analysts, like Michael Brown from Pepperstone, speculate if this surge is speculative and if reality will set in, especially with the CPI data expected later in the day.

Investors are hesitant to anticipate significant hawkish shifts in the market, given the current expectations for no rate hikes in 2024, although they have scaled back their expectations for rate cuts due to persistent inflation.

Recent data showed U.S. producer prices rose more than forecasted in April, indicating ongoing high inflation in the second quarter.

Fed Chair Jerome Powell described the PPI data as "mixed," not necessarily "hot," as the previous month's data was revised downward.

There's anticipation regarding the CPI report, with expectations of a 0.4% increase in April, matching March's rise.

In China, stocks declined due to fresh U.S. tariffs on Chinese goods, which also impacted iron ore prices.

Ahead of the CPI report, the dollar remained stable, while the euro reached a one-month high against the dollar.

Commodity markets saw oil prices edging up as wildfires threatened Canada's oil sands and in anticipation of a drop in U.S. crude oil and gasoline inventories.

Paraphrasing text from "Reuters" all rights reserved by the original author.