Meme stocks soared again on Tuesday, as US equities more broadly stayed muted amid a mixed inflation reading. Investors also awaited a Jerome Powell speech that could shed light on the path of interest rates.
The S&P 500 (^GSPC), Dow Jones Industrial Average (^DJI) and the tech-heavy Nasdaq Composite (^IXIC) were all little changed at the open on Tuesday.
New data on Tuesday showed wholesale prices increased 0.5% month-over-month in April, above the 0.3% consensus had expected, per the latest release of the Producer Price Index, which measures prices producers receive for goods produced. Also, in the release, March’s monthly price increase was revised lower to a decrease of 0.1% from an initial reading of 0.2% increase.
Still, a more crucial reading of inflation is expected on Wednesday with the release of the Consumer Price Index.
AMC (AMC) shares surged, up over 120% while GameStop (GME) popped about 100% as retail investors piled in for a second day. A rally in meme darlings dominated Monday’s session, with both scoring over 70% in gains as the return of an influential social media star kick-started a new mania for meme stocks.
More broadly, stocks have paused their recent rally as investors wait to discover whether inflation has become less sticky and started to fall, setting the stage for interest rate cuts. A chorus of Federal Reserve officials have sent a clear message they won’t lower rates until they’re confident of a cooling.
Investors will listen closely to comments from Fed Chair Powell on Tuesday morning for any hints to progress on the inflation mission and how the US economy is holding up.
Read more: How does the labor market affect inflation?
On the corporate front, Alibaba (BABA) shares fell around 6% on the heels of its fourth quarter earnings report. The Chinese e-commerce giant posted a worse-than-expected 86% drop in profit but beat Wall Street estimates for revenue.
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