Dow futures jump more than 350 points as another report suggests inflation may be easing

Strategas' Chris Verrone on average stock vs.  the wider market

Stock futures rose on Tuesday after another report signaled that inflation may be easing, reviving a rally in stocks.

Futures tied to the Dow Jones Industrial Average rose 362 points, or 1.1%. S&P 500 futures rose 2.1% and Nasdaq 100 futures rose 2.8%.

The producer price index, a measure of wholesale inflation, rose 0.2% for the month, against the Dow Jones consensus estimate of a 0.4% increase. The report comes after last week’s consumer price index data showed signs that inflationary pressures eased last month, sparking a sharp recovery.

Walmart shares jumped in premarket trading after the company beat Wall Street’s revenue and earnings estimates and raised its full-year guidance. Home Depot also reported strong results but kept its guidance in place for the full year. Shares fell slightly.

“After last week’s CPI shortfall led to a huge equity rally and reversal in the dollar, the critical theme for markets this week will be the Fed’s response,” Huw Roberts, chief analyst at Quant Insight, wrote in a Monday note.

Elsewhere, Taiwan Semiconductor, Louisiana-Pacific and Paramount jumped after regulatory filings showed Warren Buffett’s Berkshire Hathaway had bought new positions in the first two and raised its stake in the latter.

Earnings season continues this week with retail reports from Target, Lowe’s, Bath and Body Works, Macy’s, Kohl’s and Foot Locker on deck.

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