S&P, Nasdaq futures turn positive after tame inflation data

(Reuters) – U.S. stocks steadied slightly after their worst day in eight months on Thursday as a smaller-than-expected rise in consumer prices suggested inflationary pressures were easing, weakening the case for an aggressive campaign of further interest rate rises.

A trader works on the floor of the New York Stock Exchange (NYSE) in Manhattan in New York, U.S., October 11, 2018. REUTERS/Brendan McDermid

The Consumer Price Index (CPI) increased 0.1 percent last month, Labor Department data showed, as did core CPI, which excludes volatile food and energy components. Both were below economists’ forecasts of a 0.2 percent climb.

The main U.S. stock indexes were still slightly lower after opening, but U.S. Treasury yields, whose rise above 3 percent has been a key factor weakening demand for U.S. stocks, retreated further after the numbers.

A trader works on the floor of the New York Stock Exchange (NYSE) in Manhattan as lithium producer Livent Corp hold its IPO in New York, U.S., October 11, 2018. REUTERS/Brendan McDermid

“At least for right now, inflation fears seem to be taking a pause. There is a tendency in the markets to overact in both-ways in the short-term which is what we saw last week,” aid Art Hogan, chief market strategist at B. Riley FBR in New York.

Five of the 11 major S&P sectors rose, with some of the biggest losers from Wednesday’s slump leading the gainers.

The technology sector increased 0.65 percent and the communication services sector gained 0.50 percent.

The two sectors house four of the five high-growth FAANG stocks. Facebook, Apple, Netflix and Alphabet were up between 1 percent and 1.9 percent. Amazon, part of consumer discretionary, was down 0.6 percent.

Traders work on the floor of the New York Stock Exchange (NYSE) in Manhattan in New York, U.S., October 11, 2018. REUTERS/Brendan McDermid

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