U.S. stock futures rise as April CPI shows lower than expected inflation increase

April's CPI report revealed a 2.3% annual inflation rate, the slowest since 2021, boosting market optimism. Analysts remain cautious about the long-term effects of tariffs on inflation as the economy navigates uncertainty.

Sources:
Yahoo FinanceBloombergCnbc+4
Updated 38m ago
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The Headline

April CPI report reveals easing inflation pressures

Good news on inflation, and we need it given inflation shocks from tariffs are on their way.
Robert Frick
corporate economist at Navy Federal Credit Union
Despite the encouraging inflation reading, economic uncertainty remains high.
Jake Krimmel
Senior Economist at Realtor.com
The downside surprise in the CPI doesn’t mean tariffs aren’t impacting the economy, it just means they aren’t showing up in the data yet.
Ellen Zentner
chief economic strategist at Morgan Stanley Wealth Management
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April CPI annual rate
2.3%
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Expected April CPI annual rate
2.4%
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Decrease in egg prices
12.7%
Cnbc
Increase in egg prices from a year ago
49.3%
Cnbc
Key Facts
  • The April CPI cooled to a 2.3% annual rate, which was below expectations at 2.4%.1
  • The headline CPI and the core, excluding food and energy, each rose 0.2% on the month, undershooting the median estimate in Bloomberg’s survey for 0.3% increases.Bloomberg
  • Egg prices tumbled, falling 12.7%, though they were still up 49.3% from a year ago.Cnbc

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Future Outlook

Economic outlook amid tariff uncertainties

The Fed must remain attentive to risks on both sides of its dual mandate due to tariffs and a slowing economy.
Jerome Powell
Fed Chair
Realtor
Anticipated interest rate cuts
2 cuts
Reuters
Key Facts
  • Traders leaned into bets that the U.S. Federal Reserve would hold off on lowering interest rates until September, while still anticipating two 25-basis-point cuts by the end of the year.Reuters
  • For homebuyers, it means that dramatic relief on mortgage rates remains unlikely in the immediate future.Realtor
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Background Context

Historical tariff impacts and inflation context

Current U.S. effective tariff rate
13.1%
Reuters
Previous U.S. effective tariff rate
22.8%
Reuters
Key Facts
  • The U.S. effective tariff rate is now at 13.1%, a significant drop from 22.8% prior to the agreement, marking levels unseen since 1941.Reuters

Other Facts in these Reports

The Dow Jones Industrial Average slid 0.5%, weighed down by a sharp fall in shares of UnitedHealth.
Yahoo Finance
The S&P 500 hovered around the flat line, after the broad benchmark on Monday as investors celebrated.
Yahoo Finance
The Nasdaq Composite pushed up nearly 0.3%.
Yahoo Finance
Stocks rallied and bonds sold off on Monday as Wall Street rotated back toward riskier assets.
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