Investing.com – U.S. stock index futures rose in after-hours trading on Wednesday, extending gains after signs of a modest decline in consumer inflation sent Wall Street to record highs on hopes of lower interest rates.
Wall Street rose while dollar and Treasury yields fell after slightly softer-than-expected CPI data showed traders became more confident the Federal Reserve will begin cutting interest rates in September
The gain was reflected in after-hours trading, adding 0.1% to 5,338.75 points. rose 0.2% to 18,724.50 and was up 0.1% at 40,092.0 by 20:17 ET (0017 GMT).
Cooling CPI fuels bets of September rate cut
Data on Wednesday showed inflation rose at a slightly slower-than-expected month-on-month pace in April, while excluding volatile food and energy prices it fell to 3.6% year-on-year from 3. 8% in March.
While inflation did fall in April, it was still well above the Fed’s annual target of 2%. It also followed stronger-than-expected gains on Tuesday.
However, investors have seen growing expectations of a 25 basis point rate cut in September, the probability of which now stands at 53.8%, according to . This is an increase from the 49.0% chance seen last week.
Wall Street rallied over the prospect of interest rate cuts, especially after multiple Fed officials signaled that inflation would be a key factor in lowering rates.
Weak data for April released on Wednesday also boosted hopes that inflation will ease in the coming months.
remove ads
.
Technology stocks were also the deal’s biggest benefactors.
On Wednesday, the index rose 1.2% to 5,308.15 points and 1.4% to 16,742.39 points. The index rose 0.9% to 39,908.0 points, with all three indexes closing at record highs.
Meme Stocks Gain Cools as GME and AMC Fall
The two-day rally in so-called meme stocks fizzled out on Wednesday. GameStop Corp. (NYSE:) and AMC Entertainment Holdings Inc (NYSE:) fell about 20% during the session. These two companies saw significant losses in the secondary market, falling 9% and 6.4%, respectively.
The rise in meme quotes was fueled largely by the social media account of Keith Gill, whose X-based handle “Growling Kitten” began posting after an absence of nearly three years. Gill has been the figurehead of the meme action in 2021, especially his Gamestop posts.
Secondary Market Drivers: Chubb hits record high as Berkshire takes stake
Shares of insurance company Chubb Ltd (NYSE:) rose more than 7% to a record high in after-hours trading following Warren Buffett’s exit. Berkshire Hathaway Inc. (NYSE:) said it acquired a $6.72 billion stake in the firm.
Cisco Systems Inc (NASDAQ:) shares rose nearly 5% after the communications equipment maker posted better-than-expected quarterly earnings.