US equity futures climbed, and Treasury yields dipped on Tuesday, buoyed by better-than-expected producer inflation data that eased fears about persistent price pressures.

Inflation Data: A Positive Surprise

The US producer price index (PPI) for December rose just 0.2% month-over-month, significantly lower than the 0.4% forecast. Annually, the PPI increased by 3.3%, compared to the anticipated 3.5%. This softer inflation data has set an optimistic tone ahead of Wednesday’s consumer inflation numbers, which are expected to show a slight uptick from the previous month.

Futures Market Reaction

• Nasdaq 100 futures rose by 0.8%.
• S&P 500 futures gained 0.7%.

These gains come on the heels of reports suggesting that the incoming Donald Trump administration is considering gradual tariff hikes of 2% to 5% per month instead of sharp, one-time increases.

Technology Stocks Rebound

Technology stocks, which faced pressure in Monday’s session, staged a recovery in premarket trading:

• Nvidia and Palantir each climbed over 1%.
• AppLovin added 0.7%.

These companies have been among the standout performers in 2024, contributing to renewed investor optimism.

Key Movers in the Market

Several companies made headlines with significant premarket moves:

1. Teladoc Health
   Teladoc shares surged 4% after announcing a partnership with Amazon. The virtual healthcare provider will now offer its diabetes, hypertension, and weight-management programs on Amazon’s platform, expanding its reach in the digital health market.
2. H&E Equipment Services
   H&E shares skyrocketed by over 100% after United Rentals revealed plans to acquire the rental equipment company. United Rentals will pay $92 per H&E share in cash, valuing the deal at approximately $4.8 billion. United Rentals’ own stock gained 2% in premarket trading.
3. Applied Digital
   Applied Digital shares soared 19.3% following news of a $5 billion investment from Macquarie. The deal, which includes Macquarie acquiring a 15% stake in Applied Digital’s high-performance computing business, will bolster the company’s AI data center operations.
4. Hesai
   The Chinese automotive supplier saw its US-listed shares rise 6.4% after an upgrade from Goldman Sachs. Analyst Tina Hou highlighted the market’s underestimation of Hesai’s operating leverage in its new product cycle, calling the shares “attractive” at current levels.

With producer inflation data calming nerves, investors are now focused on the upcoming consumer inflation report, which could further shape market sentiment. If the data aligns with or comes in below expectations, it could reinforce the notion that inflationary pressures are easing, giving equity markets additional momentum.