Stock market today: S&P 500, Nasdaq eye a rebound as futures rise

US stock futures rose across the board on Tuesday as investors took in the first of two key inflation reports this week, which showed prices rose less than expected in December. Also in focus was a report that the incoming Trump administration could hike tariffs more gradually to ease inflationary pressures.

S&P 500 futures (ES=F) moved up roughly 0.5%, while those on the tech-heavy Nasdaq 100 (NQ=F) put on 0.7%, both set to bounce back from Monday’s losses. Meanwhile, Dow Jones Industrial Average futures (YM=F) added 0.3% on the heels of a winning day for the blue-chip index.

The Producer Price Index, which tracks price changes companies see at a wholesale level, rose 3.3% over last year, up from 3% in November but less than economists expected. It rose 0.2% over the previous month, also less than expected. The report lays the groundwork for Wednesday’s heavily anticipated consumer inflation print.

Meanwhile, President-elect Donald Trump’s team is considering a month-by-month rollout of promised tariff increases rather than imposing higher levels in a single move, Bloomberg reported, in a bid to help prevent inflation spikes.

The likelihood that Trump’s policies will pump up price pressures has been worrying markets, as that could limit the Federal Reserve’s scope for cutting interest rates. But gradual tariffs could still be “problematic” for the central bank’s efforts to finish the job of cooling inflation, a UBS strategist said.

After the tariff report, the dollar (DX-Y.NYB) retreated after a five-day winning streak, while the 10-year Treasury yield (^TNX) pulled back from the 14-month highs tapped in Monday’s bond sell-off.

On the corporate front, shares of KB Home (KBH) jumped almost 10% in pre-market trading after the home builder’s fourth quarter earnings beat estimates.

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PPI shows wholesale inflation increased less than expected in December

Wholesale prices rose less than expected in December, a positive sign for the economy amid recent market fears that inflation isn’t falling as quickly as hoped to the Federal Reserve’s 2% target.

Tuesday’s report from the Bureau of Labor Statistics showed that its producer price index (PPI) — which tracks the price changes companies see — rose 3.3%% from the year prior, up from the 3% seen in November but below the 3.5% increase economists had projected. On a monthly basis, prices increased 0.2%, below the 0.4% increase economists had expected.

Excluding food and energy, “core” prices increased 3.5% year-over-year, above November’s 3.4% increase. Economists had expected an increase of 3.8%. Meanwhile, month-over-month core prices were unchanged, below the 0.3% increase economist had expected and the 0.2% increase seen last month.
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Goldman Sachs estimates wildfire economic impact

The Goldman Sachs team said in a note this morning that the combined property losses from the Eaton and Palisades fires are on track to top the single most destructive wildfire (the Camp Fire in 2018) in California history.

Insured losses are pegged at $10 billion to $30 billion, Goldman estimates.

Here’s the firm’s estimates on the near-term economic impact:

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PPI shows wholesale inflation increased less than expected in December

Good morning. Here’s what’s happening today.

Goldman Sachs estimates wildfire economic impact