Commodity prices are cooling off — here's why that could be good news for stocks

A worker operates a forklift to move bundles of Hampton lumber for a shipment order at Burton Lumber in Salt Lake City, Utah, on Thursday, May 6, 2021.
George Frey | Bloomberg | Getty Images

The price charts of some key commodities have turned south in recent days, and that could be welcomed news for a stock market trying to break out to new highs.

Raw materials, agricultural products and key industrial inputs have spiked this year as the world economy tries to ramp back up from the Covid-19 pandemic, fanning fears about inflation. However, some of that fever appears to have broken in recent days, with the prices of futures contracts for lumber and corn dropping sharply.

Evercore ISI's Ed Hyman said the markets were at a "critical juncture" with respect to inflation, and the recent dip in commodities could be a positive sign. 

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