Premarket: Stocks at record high ahead of U.S. inflation data; meme mania heats up

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Shares in AMC and GameStop soar more than 25 per cent in premarket trading

Global shares rose while the U.S. dollar retreated on Wednesday, after a hot reading of U.S. wholesale inflation set a nervous tone for trading ahead of the consumer price report that could prove decisive in when the Federal Reserve cuts interest rates.

Price action was more subdued as investors were reluctant to push any market too aggressively one way or another ahead of the monthly U.S. consumer price index later in the day. The boom has drawn parallels with the meme-stock craze that gripped markets in early 2021, where retail traders, using trading platforms and social media investment advice pumped up the value of stocks that many large investors had bet heavily against.

Investors do not anticipate any rate hikes in 2024, but they have had to dial back their expectations for rate cuts, given how sticky inflation is. They currently price in 43 basis points in cuts by December, compared with 150 bps in cuts anticipated at the start of 2024. CPI is expected to have risen by 0.4 per cent in April, matching March’s increase, according to a Reuters poll.over rate cut expectations, although the Fed chief, along with Cleveland Fed President Loretta Mester, poured cold water over the notion of rate hikes, ING economists said.In China, stocks eased with the blue-chip index down 0.27 per cent, weighed down by fresh U.S. tariffs on Chinese goods, which in turn knocked iron ore prices lower.

 

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