Investing.com – U.S. stock index futures rose in after-hours trading on Wednesday, extending gains after signs of a modest decline in consumer inflation sent Wall Street to record highs on hopes of lower interest rates.
Wall Street rose while dollar and Treasury yields fell after slightly softer-than-expected CPI data showed traders became more confident the Federal Reserve will begin cutting interest rates in September
The gain was reflected in after-hours trading, adding 0.1% to 5,338.75 points. rose 0.2% to 18,724.50 and was up 0.1% at 40,092.0 by 20:17 ET (0017 GMT).
Cooling CPI fuels bets of September rate cut
Data on Wednesday showed inflation rose at a slightly slower-than-expected month-on-month pace in April, while excluding volatile food and energy prices it fell to 3.6% year-on-year from 3. 8% in March.
While inflation did fall in April, it was still well above the Fed’s annual target of 2%. It also followed stronger-than-expected gains on Tuesday.
However, investors have seen expectations rise for a 25 basis point rate cut in September, the probability of which now stands at 53.8%, according to . This is an increase from the 49.0% chance seen last week.
Wall Street rallied over the prospect of interest rate cuts, especially after multiple Fed officials signaled that inflation would be a key factor in lowering rates.
Weak data for April released on Wednesday also boosted hopes that inflation will ease in the coming months.
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Technology stocks were also the deal’s biggest benefactors.
On Wednesday, the index rose 1.2% to 5,308.15 points and 1.4% to 16,742.39 points. The index rose 0.9% to 39,908.0 points, with all three indicators closing at record highs.
Meme Stocks Gain Cools as GME and AMC Fall
The two-day rally in so-called meme stocks fizzled out on Wednesday. GameStop Corp. (NYSE:) and AMC Entertainment Holdings Inc (NYSE:) fell about 20% during the session. These two companies saw significant losses in the secondary market, falling 9% and 6.4%, respectively.
The rise in meme quotes was fueled largely by the social media account of Keith Gill, whose X-based handle “Growling Kitten” began posting after an absence of nearly three years. Gill has been the figurehead of the meme action in 2021, especially his Gamestop posts.
Aftermarket Drivers: Chubb Hit Record High When Berkshire Acquired Stake
Shares of insurance company Chubb Ltd (NYSE:) rose more than 7% to a record high in after-hours trading following Warren Buffett’s exit. Berkshire Hathaway Inc. (NYSE:) said it acquired a $6.72 billion stake in the firm.
Cisco Systems Inc (NASDAQ:) shares rose nearly 5% after the communications equipment maker posted better-than-expected quarterly earnings.