Stocks Gain Ground As Traders Ignore Rising Inflation

All Eyes On Fed Chair Jerome Powell

Today, stock traders will focus on the commentary from the Fed Chair Jerome Powell who will testify before the Congress.

Yesterday, U.S. reported that Inflation Rate grew by 5.4% year-over-year in June while Core Inflation Rate increased by 4.5%. Both reports exceeded analyst expectations and put some pressure on markets, although traders’ reaction to the news was not strong.

Powell has previously stated that the recent surge in prices was temporary, and it is interesting to see whether the latest report had any impact on his position.

It should be noted that Powell has been consistently dovish for many months, so bulls have little to fear, although the Fed may be forced to discuss the reduction of its asset purchase program in case Inflation Rate does not start to decline in the following months.

Producer Prices Increased By 1% Month-Over-Month In June

Traders have a chance to take a look at additional data on prices as U.S. has just provided Producer Prices reports for June.

On a month-over-month basis, Producer Prices grew by 1% compared to analyst consensus which called for growth of 0.6%. On a year-over-year basis, Producer Prices increased by 7.3%.

S&P 500 futures are moving higher in premarket trading, and it looks that traders are ready to shrug off worries about inflation.

WTI Oil Stays Near $75 As Report Indicates That OPEC+ Is Close To Compromise

A recent Reuters report suggested that Saudi Arabia and UAE managed to reach a compromise regarding UAE production quota. According to the report, the baseline for the calculation of production cuts for UAE will be set at 3.65 million barrels per day (bpd) from April 2022.

Yesterday, API Crude Oil Stock Change report indicated that crude inventories declined by 4.1 million barrels compared to analyst consensus which called for a decline of 4.3 million barrels.

Inventories continue to move lower, which is bullish for WTI oil. The successful resolution of OPEC+ problems may serve as an additional bullish catalyst, and it looks that WTI oil has decent chances to settle back above the $75 level which will provide more support to oil-related stocks.

For a look at all of today’s economic events, check out our economic calendar.