Investing.com -- U.S. stock futures edge up, suggesting an extension to a rally on Wall Street that was sparked by data showing a slowdown in inflation last month. Wagers that the Federal Reserve could roll out two interest rate reductions this year were bolstered by the report, although analysts noted that the central bank will likely need to see more proof that price growth is easing back down to its target level. Elsewhere, low-cost big-box chain Walmart (NYSE:WMT) is due to deliver its latest quarterly results on Thursday, while Chubb's shares spike in extended hours trading after Warren Buffett's Berkshire reveals a stake in the insurer.
1. Futures higher
U.S. stock futures pointed higher on Thursday after equities surged to a record high in the prior session following a mild monthly inflation report.
By 03:33 ET (07:33 GMT), the Dow futures contract had gained 37 points or 0.1%, S&P 500 futures had risen by 5 points or 0.1%, and Nasdaq 100 futures had climbed by 34 points or 0.2%.
Data on Wednesday showed that consumer price growth had slowed as anticipated to 3.4% on an annualized basis in April, powering bets that the Federal Reserve will start to ratchet down interest rates from more than two decade highs later this year. Traders have now priced in two cuts in 2024, up from just one earlier this week.
Stocks soared in the wake of the report, with the benchmark S&P 500 rising by 1.2%, the tech-heavy Nasdaq Composite adding 1.4%, and the 30-stock Dow Jones Industrial Average advancing 0.9%. The rate-sensitive 2-year U.S. Treasury yield, which typically moves inversely to prices, temporarily touched its lowest mark since early April, while the dollar weakened to multi-week lows against its peers.
2. Bitcoin rises amid U.S. dollar slide
Bitcoin price rose on Thursday, boosted by the slide in the dollar, although the token was comfortably rangebound as sentiment towards crypto remained subdued.
The world’s biggest cryptocurrency climbed 6.7% in the past 24 hours to $66,159.0 by 03:34 ET. The token had pushed as high as $66,600, before losing some momentum. It had dipped as low as $60,000 earlier this week.
Analysts flagged that the year-on-year pace of inflation still hovered well above the Fed's 2% target level, while a slew of officials at the central bank have warned recently that they will need much more confidence that prices are sustainably easing before trimming rates.
This notion limited any major gains in Bitcoin, keeping the token trading comfortably within a $60,000 to $70,000 range established over the past two months. The performance also comes as capital flows and trading activity in spot exchange-traded funds, which were a key driver of a March rally in Bitcoin, largely stagnated in recent weeks.
3. Walmart to report
Walmart is set to highlight the earnings calendar on Thursday, with the big-box store facing stiff competition to entice cost-conscious Americans to purchase its low-price items.
Online retail spending in the U.S. surged by 7% between January to April due in large part to strong demand for cheaper merchandise during a time of elevated inflation, according to a report from Adobe (NASDAQ:ADBE) Analytics last week. Although such a trend should bode well for Walmart, e-commerce players like Amazon (NASDAQ:AMZN) and PDD Group's Temu are presenting alternatives for shoppers keen on finding bargains on products like electronics and clothing.
Meanwhile, Walmart is restocking its inventories at a slower rate than its peers, Reuters has reported, citing LSEG figures. High levels of inventory could push up costs and dent profit margins.
Even still, shares in the company have jumped by 12.7% so far this year and are exchanging hands at around 25 times expected earnings, in a sign that investors believe that it will unveil solid quarterly results. The earnings release before the bell on Thursday could test this optimism.
4. Chubb shares spike after-hours on Berkshire Hathaway (NYSE:BRKa) stake
Warren Buffett’s Berkshire Hathaway on Wednesday revealed it had taken a $6.72 billion stake in Chubb Ltd (NYSE:CB), sending shares of the insurer surging to record highs in extended hours trade.
Chubb rose 7.5% after-hours to a record high of $271.84, after Berkshire said in a filing it owned 25.9 million shares in the firm as of March 31.
Berkshire began buying Chubb since the third quarter of 2023, and had received permission from the Securities and Exchange Commission to temporarily keep the purchase confidential. The conglomerate had received similar permissions for its other purchases in Chevron Corp (NYSE:CVX) and Exxon Mobil Corp (NYSE:XOM), as well as International Business Machines (NYSE:IBM) and Verizon Communications (NYSE:VZ).
Chubb clocked strong earnings in the first quarter of 2024. Gross premiums crossed $14 billion and net income surged to $5.23 from $4.54 last year.
5. Crude rises after inflation data, inventories
Crude prices inched up on Thursday following the U.S. consumer inflation release and a bigger-than-expected draw in U.S. inventories.
By 03:31 ET, the U.S. crude futures traded 0.4% higher at $78.96 per barrel, while the Brent contract climbed 0.4% to $83.07 a barrel.
The inflation data bolstered the prospect of lower interest rates, potentially lifting future global economic activity and, by extension, oil demand.
Official data on Wednesday also showed that U.S. oil inventories shrank by a bigger-than-expected 2.5 million barrels in the week to May 10, increasing hopes that demand was improving in the world’s biggest fuel consumer, especially as the travel-heavy summer season approaches.