Key Insights Before Wednesday's Stock Market Opening Bell

Investors are keeping an eye out for any updates on the fight against rising prices when the inflation report comes out on Wednesday morning. Here’s what else you should know before the stock market opens.

US CPI Release

In the spotlight of this week's economic events, the imminent publication of the U.S. Consumer Price Index (CPI) on Wednesday morning is particularly noteworthy.

This report is expected to be unveiled at 8:30 a.m. ET is anticipated to show monthly increases of 0.3% in both the overall CPI and the core measure, which excludes the more volatile costs of food and energy. Such movements would elevate the annual inflation rates to 3.4% and 3.7%, respectively.

The Federal Reserve, which has long awaited inflation rates to stabilize at a 2% target before considering interest rate cuts, will be closely monitoring this data. Amidst speculation surrounding the Fed's monetary policy direction, especially after recent robust job growth figures and a series of hawkish remarks from Fed officials, the CPI data emerges as a critical indicator. With Fed funds futures contracts signaling a shift in expectations for rate cuts, a strong CPI reading could further push back the commencement of the rate-reducing cycle, possibly moving it from June to July.

Intel Reveals Gaudi 3 Chip

Intel (NASDAQ: INTC) has just revealed its newest AI chip, named Gaudi 3, aiming to compete with Nvidia, the current market leader with about 80% of the AI chip market. Intel claims that Gaudi 3 is designed to train large AI models like OpenAi's ChatGPT, boasting that it's more energy-efficient and 1.5 times faster than Nvidia's H100 GPU.

While Intel hasn't shared how much the Gaudi 3 will cost, it announced that it'll be available in the third quarter and companies like Dell (NYSE: DELL), HP (NYSE: HP), and Supermicro (NASDAQ: SMCI) will be using it in their systems.

Oil Prices Reflect Middle East Uncertainties

The ongoing conflict in the Middle East, with no clear resolution in sight, continues to unsettle the oil markets. Despite a modest rise in oil prices, the lingering possibility of a broader regional conflict, particularly involving Iran, adds to the volatility. Concurrently, a larger-than-expected increase in U.S. crude inventories suggests a less tight supply than previously feared, tempering price gains.

Fitch Downgrades China's Outlook to 'Negative'

Fitch Ratings reduced China's credit outlook to 'Negative' from 'Stable' on Wednesday, attributing the change to rising public debt and slower economic growth. Despite maintaining China's A+ rating, Fitch highlighted increased risks amid a shift from property-driven growth.

The agency forecasts a dip in GDP growth to 4.5% in 2024 from 5.2% in 2023, amidst concerns over a lackluster post-COVID recovery and a prolonged slump in the property market. This follows a similar move by Moody's in December.

Delta Air Lines Inc. Q1 Earnings Meet EPS Forecasts, Revenue Rises

Delta Air Lines Inc (NYSE: DAL) unveiled its financial outcomes for the March 2024 quarter, disclosing an operating revenue of $13.7 billion on a GAAP basis and $12.6 billion on an adjusted basis, a 6% increase from the prior year, which matched analyst predictions.

The airline, serving over 300 destinations worldwide, reported adjusted earnings per share of $0.45, aligning with expectations and marking a significant pre-tax income of $380 million.

Delta showcased operational reliability and financial robustness, with $1.4 billion in profit-sharing for employees, and anticipates a strong June quarter with expected revenue and EPS growth.

CEO Ed Bastian and President Glen Hauenstein highlighted the airline's record revenues, operational excellence, and optimistic outlook for the coming quarter, emphasizing Delta's solid position amidst the transportation sector's challenges. Delta's strategic focus and financial resilience reflect its ongoing commitment to operational excellence and customer satisfaction, underpinning its competitive edge in the industry.