06:47 AM EDT, 05/13/2024 (MT Newswires) -- US equity investors will look this week for consumer and producer price inflation readings, as a softening will likely bolster market expectations the Federal Reserve could begin its easing cycle soon.

* Following three hotter-than-expected reports in January, February, and March, the April consumer price index will likely increase 0.4% month-over-month in April and 3.4% from a year ago, potentially slipping from the 3.5% gain in March, Stifel said on Friday. The April producer price index, also due this week, will probably rise 0.3% on the month and 2.2% on the year, potentially advancing from the 2.1% annual increase in March.

* Excluding food and energy costs, the April core CPI will likely grow 0.3% from the prior month and 3.6% from a year earlier, potentially retreating from the 3.8% annual gain in March. Core PPI will probably rise 0.2% and 2.3%, respectively, likely slowing from 2.4%.

* "If it's a cooler reading, then it could reignite market price for cuts but it wouldn't be enough to sway the Fed any time soon," Derek Holt, head of capital market economics, Scotiabank, said Friday. "A warm/hot reading would probably offer further motivation for FOMC officials to take an axe to the cuts shown in the March dot plot."

* The probability of the Fed cutting rates in September stood at 50% according to the CME FedWatch tool.

* With Q1 results of 92% of S&P constituents out, earnings rose 3.7%, outpacing the FactSet consensus as of March 3 for a gain of 3.1%, D. A. Davidson said in a note Saturday. Through Friday, nine of the 11 S&P 500 sectors beat forecasts. Home Depot (HD), Cisco (CSCO), and Walmart (WMT) are among the firms reporting this week.

* Apart from earnings, US equity indexes rose last week because Fed Chair Jerome Powell rejected the possibility of interest-rate hikes and from supportive macroeconomic data.