CPI may disappoint in the long run 13/05/2025

HOT stories for today

US market wrap:

• U.S. equities soared on Monday after a major advancement in trade discussions between the United States and China. The Dow Jones Industrial Average skyrocketed by more than 1,100 points, while the S&P 500 surged over 3%, trimming its losses for the year to just 0.6%. Meanwhile, the Nasdaq Composite rallied 4.4%. All three major indexes recorded their strongest single-day gains since April 9.
• The rally was driven by news that both countries had agreed to a 90-day reduction in tariffs, alleviating market fears surrounding prolonged trade tensions. Following weekend negotiations in Switzerland, the U.S. and China reached an agreement to reduce mutual tariffs to 10%. However, the United States will maintain its 20% duties on Chinese imports related to fentanyl, keeping the overall tariff level on Chinese goods at 30%.

CPI may disappoint in the long run
 

• Economists expect April’s consumer prices to rebound, with headline CPI rising 0.2% and core CPI up 0.3%, keeping annual rates at 2.4% and 2.8%, respectively, as early tariff effects begin to filter into consumer costs. Categories like home furnishings, where China dominates supply chains, are expected to show the first signs of pricing pressure. Muted gasoline and rental prices may help temper the overall numbers, though used-car costs could lift the core figure, according to BMO Capital.
• Looking ahead, inflation may intensify into June and July as 30% tariffs take full effect, with core CPI potentially peaking near 3.5% if levies remain in place. The Federal Reserve is expected to maintain rates until clear signs emerge that tariff-driven inflation has peaked, likely by August, though officials remain on alert for a shift toward services-sector price increases.

Stocks on the move:
 

• Archer Aviation (ACHR) — Shares of the electric vertical takeoff and landing (eVTOL) developer jumped nearly 5% in post-market trading following a quarterly report that exceeded bearish expectations. The company reported a net loss of $93.4 million, which was narrower than analysts' consensus forecast of a $116.9 million loss, according to FactSet.
• Rigetti Computing (RGTI) — The quantum computing specialist saw its stock plunge over 13% in after-hours trading after posting disappointing first-quarter results. Revenue came in at approximately $1.5 million, significantly missing the $2.6 million consensus estimate from FactSet.
• Coinbase (COIN) — The cryptocurrency exchange rallied 8% after hours on news it will be added to the S&P 500 index, replacing Discover Financial Services (DFS). The index adjustment will take effect prior to market open on May 19. Discover is currently undergoing acquisition by Capital One Financial (COF).

Today’s action
 

• Asia-Pacific markets displayed a varied performance on Tuesday, following Wall Street’s significant surge driven by a newly announced trade agreement between the U.S. and China. The deal features a 90-day suspension of tariff hikes and a combined reduction in import duties totaling 115 percentage points. Strategists at the Japanese financial firm Nomura have revised their stance on Chinese stocks, shifting to a “tactical overweight” position, indicating short-term bullishness.
• Meanwhile, U.S. equity futures declined during overnight trading, retracing some of Monday’s strong gains as investors awaited a crucial inflation update scheduled for Tuesday morning. Futures tied to the Dow Jones Industrial Average edged down 101 points, or 0.24%. Contracts on the S&P 500 slipped by 0.35%, while Nasdaq 100 futures dropped 0.44%. The Consumer Price Index (CPI)—a comprehensive measure of inflation across goods and services—is projected to hold steady at an annual rate of 2.4% for April, according to a consensus compiled by Dow Jones. Core CPI, which strips out volatile components like food and energy, is also anticipated to remain unchanged from the previous month at 2.8% year-over-year.

Watchlist: TSLA, AMZN, AAPL, RGTI, COIN, NVDA, SE, ONON

Bitcoin
 

• Bitcoin is currently trading at $101,645, reflecting a 2.79% drop over the past 24 hours, while Ethereum is down 2.9%, trading around $2,432. This decline comes amid a wave of forced liquidations in the crypto derivatives market. In the past 24 hours, approximately $699.71 million in leveraged positions have been liquidated.
• Long positions made up the majority of the losses, accounting for $484.85 million, while short positions saw $214.86 million in liquidations. Bitcoin traders were hit hardest, absorbing $80.02 million in liquidations, with Ethereum traders following behind at $45.49 million. The widespread shakeout highlights ongoing volatility and heightened risk across the crypto space.
  Watchlist: Bitcoin: 74 000-105 500, Ethereum:1500-2800, Solana: 80-180

Forex
 

• EUR/USD is under renewed pressure as the U.S. Dollar stays firm amid positive momentum in U.S.-China trade talks, following a preliminary agreement to ease tariffs. The pair opened Tuesday’s Asian session near 1.1110, recovering slightly after a sharp 2.5% drop in the prior session. Weak eurozone inflation and expectations that the ECB may extend its easing cycle continue to weigh on the euro.
• USD/JPY retreats to around 147.90 after climbing more than 2% previously. Despite ongoing policy uncertainty at the Bank of Japan, the yen is regaining strength. Comments from BoJ Deputy Governor Shinichi Uchida highlighted both upside and downside risks to Japan’s inflation due to shifting U.S. trade policy.
  Watchlist: EUR/USD: 1.0700-1.1600, USD/JPY: 140-151

Basic Materials
 

• Gold (XAU/USD) trades slightly lower around $3,235 in Tuesday’s Asian session, pressured by a stronger U.S. Dollar, rising yields, and reduced safe-haven demand following a U.S.-China tariff truce. Focus now shifts to the upcoming U.S. CPI report, expected to offer clues on inflation and Fed policy. 
• WTI crude oil eases to $61.40 per barrel, snapping a three-day rally. While optimism over U.S.-China trade progress supports prices, concerns about a potential supply glut from rising OPEC+ output cap further gains.
  Watchlist: GOLD 2600-3500, US Oil: 55.60-70.00

Key Economic Events Today:

EST time
06:00 am: USD NFIB Small Business Index
08:30 am: USD CPI, Core CPI



Earnings

BMO (Before the US Market opens)
SE                Sea Limited
JD                JD.com Inc.
ONON         ON Holding AG
AMC (After the US Market closes): ALC, EXEL

 

The TEFS Analyst team wishes you a successful day!