Tonight’s Highlights: U.S. April CPI Climbs to 3.8%; Index Futures Retreat Collectively
U.S. stock index futures trended lower on Tuesday as resurgent oil prices weighed on market sentiment. European equities followed suit, posting broad declines.
Pre-market data revealed that the U.S. Consumer Price Index (CPI) rose 3.8% year-over-year in April, marking its highest level since May 2023. This surpassed the market estimate of 3.7% and the previous month’s reading of 3.3%. On a monthly basis, the index rose 0.6%, in line with expectations.
The Core CPI, which excludes volatile food and energy costs, climbed 2.8% year-over-year (vs. 2.7% expected) and rose 0.4% month-on-month .
As diplomatic efforts to resolve the Middle East conflict remain stalled, international oil prices continued their ascent. Brent crude, the global benchmark, surged over 3% to trade above $108 per barrel.
The inflationary data comes just after the S&P 500 and Nasdaq Composite both notched record highs in the previous session, driven by a robust earnings season.
Despite the immediate pullback, Marci McGregor, strategist at Bank of America Merrill Lynch, remains optimistic about the long-term outlook.
"If we see a correction following the strong rally from the March lows, I would view it as a buying opportunity," McGregor noted. "The market is fundamentally supported by corporate earnings, capital expenditure, and a resilient labor market."
Corporate News
OpenAI & Microsoft: The two companies have reportedly reached an agreement to cap their total revenue-sharing payments at $38 billion. Microsoft clarified in April that while these payments will continue through 2030, the specific distribution ratios previously agreed upon will remain in place until the cap is reached.
Google: Google’s Threat Intelligence Group reported the first instance of cyberattackers using AI to develop "zero-day" exploit tools. The tool, targeting a popular open-source web-based management system, utilizes Python scripts to bypass two-factor authentication. Google has notified the affected companies and neutralized the threat.
Waymo: Alphabet’s autonomous driving unit is recalling 3,791 vehicles in the U.S. due to a software glitch that could increase the risk of collisions or injuries, according to the National Highway Traffic Safety Administration (NHTSA).
Netflix: The streaming giant revealed it has invested over $135 billion in original film and television content over the past decade. During this period, the company estimates it has contributed $325 billion to the global economy and created over 425,000 jobs in production.
Amazon: Plans to expand its "Amazon Now" 30-minute delivery service to millions of additional users by the end of the year. The service, already established in cities like Seattle and Dallas, is rapidly scaling across dozens of other U.S. metropolitan areas, including Houston, Denver, and Phoenix.