The Global Stock Market Rises as Investors Await Inflation Data

Global stocks climbed on Monday, while U.S. index futures slightly declined, marking the start of a week highlighted by the release of a critical U.S. inflation measure.

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U.S. equity and bond markets were closed for Memorial Day, and U.K. markets were also shut for a holiday, resulting in light trading volumes due to many investors being away. As of 8 a.m. ET, contracts tied to the S&P 500 had slipped less than 0.1%.

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The Federal Reserve’s preferred inflation measure, the personal-consumption expenditures price index, is set to be released on Friday. Additionally, this week will see inflation readings for the eurozone and Australia, with several Federal Reserve and European Central Bank policymakers scheduled to speak.

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“A lot of the market’s attention is focused on what central banks will do next,” said Florian Ielpo, head of macro at Lombard Odier Investment Managers.

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According to Ielpo, conflicting data on growth and inflation has increased market volatility. He noted recent purchasing managers' index data indicating accelerating U.S. economic activity, which has rekindled inflation concerns. “It creates a layer of confusion about what the Fed is likely to be doing next,” he explained.

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U.S. stock investors are also anticipating earnings reports this week from companies such as Salesforce, Costco Wholesale, and Dollar General. GameStop, a meme-stock favorite, is expected to draw attention as well. Its shares surged late Friday after the company announced it had raised $933 million by leveraging a recent rise in its stock price.

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The Stoxx Europe 600 edged higher on Monday after ECB chief economist Philip Lane indicated that the path for rate cuts is clear. The European Central Bank has already suggested it might implement its first rate reduction on June 6, ahead of the Fed, but policymakers remain uncertain about the subsequent course.

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Despite this, Lane emphasized that the ECB needs to maintain restrictive policies to ensure continued easing of inflation. The euro gained 0.2% against the dollar.

Asian stocks broadly rose, with Hong Kong’s Hang Seng Index, the Shanghai Composite, and South Korea’s Kospi Composite each advancing more than 1%.

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Semiconductor stocks saw gains after China announced a nearly $48 billion fund to support its chip industry. Additionally, shares in Evergrande’s electric-vehicle arm surged on news that the property giant’s liquidators were negotiating to sell a significant stake in the unit.

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Gold and copper prices rebounded on Monday after dropping 3.3% and 5.5%, respectively, the previous week. Benchmark Brent crude-oil futures rose 0.6% to $82.31 a barrel.

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This week also brings a significant change to the operations of U.S. financial markets: the implementation of a shorter settlement cycle, known as T+1. Starting Tuesday, trades in stocks, bonds, and exchange-traded funds will be settled in one business day, meaning shares are delivered to buyers and cash to sellers in half the current time.

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While the change is expected to be largely imperceptible to traders, industry experts suggest that ordinary investors could benefit by receiving cash from stock sales more quickly.

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