Stock Market Today: Dow Set to Open Up Ahead of PPI Inflation Report; GameStop, Alibaba, AMC, Home Depot, and More Movers

The date come ahead of the closely watched consumer-price index (CPI) measure of inflation set for release on Wednesday. Investors want to see signs that price growth continues to cool, with risks remaining that indications of sticky inflation could push back rate-cut bets or even raise the prospect of another rate hike.

The producer price index rose in April, a sign that inflation is remaining sticky one day ahead of the highly anticipated consumer price index reading.

The producer price index increased 0.5% in April from March, according to the Bureau of Labor Statistics. Economists surveyed by FactSet were expecting PPI to rise 0.3%.

PPI increased rose 2.2% in April from the prior year. That’s the largest increase since rising 2.3% for the 12 months ended April 2023, the BLS said.

Core PPI, which excludes food and energy, rose 0.5% in April, when economists expected a 0.2% gain.

Market participants have been eagerly awaiting more inflation data following last month’s CPI report that also rose more than estimates. The Federal Reserve has kept rates higher for longer than previously expected in its battle to fight sticky prices. Tuesday’s data does not give investors any reason to believe the central bank will be in a rush to start cutting interest rates.

“Tuesday’s stronger-than-expected PPI data is yet another inflation print that is taking longer to decelerate, which is why the Federal Reserve is likely to only cut interest rates once this year, and likely towards the very end of the year, in an effort to give inflation more time to settle down,” Clark Bellin, president and chief investment officer of Bellwether Wealth, wrote.

Small businesses in the U.S. are feeling a little less gloomy, though inflation remains the number-one headache.

The National Federation of Independent Business said Tuesday that its small-business optimism index rose to 89.7 in April, marking the first time this year that businesses expressed a cheerier outlook. The reading remains well below the long-term average, nonetheless.

Price inflation is still businesses’ primary cause of concern, but the proportion of owners flagging it as their single most important problem dropped from March.

“Cost pressures remain the top issue for small business owners,” said Bill Dunkelberg, chief economist at NFIB. Higher wages are a key part of this concern, he said.

“Small business owners remain historically very pessimistic as they continue to navigate these challenges,” Dunkelberg said.