U.S. stocks pare rally as risk-on mood after CPI fades - BNN Bloomberg

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Stocks trimmed a rally on Thursday spurred by softer-than-expected US inflation data as investors digested comments from Federal Reserve officials who remained resolute on the need for further interest-rate hikes.

Europe’s Stoxx 600 Index gave up most of an initial advance, a day after surging to the highest in two months following the CPI report. US futures were off their highs for the session after the S&P 500 hit a three-month high and the Nasdaq 100 pulled 20 per cent above a June low on Wednesday.

“The Fed is still very clearly on a tightening path,” Sonja Marten, chief currency strategist at DZ Bank AG, said on Bloomberg Television. “Inflation might have come down slightly, but it’s still at 8.5 per cent, which is still very high with a very tight labor market. There is no reason for the Fed to slow down now. They’re going to keep going and then slow down into the coming year.”

In Asian trading, tech shares spurred a more than 1 per cent climb in a regional equity index. China’s bourses advanced even as investors digested a warning from its central bank about inflation threats and a pledge to avoid massive stimulus.Minneapolis Fed President Neel Kashkari said he wants the Fed’s benchmark interest rate at 3.9 per cent by the end of this year and at 4.4 per cent by the end of 2023.

Chicago counterpart Charles Evans said inflation remains “unacceptably high” and that “we will be increasing rates the rest of this year and into next year.”

 

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