CNBC Daily Open: Inflation isn't coming down fast enough

This report is from today's CNBC Daily Open, our international markets newsletter. CNBC Daily Open brings investors up to speed on everything they need to know, no matter where they are. Like what you see? You can subscribe here.

South Korea's Kospi rallies
South Korea stocks rallied Tuesday with the Kospi hitting its highest level in over two years, while the smaller-cap Kosdaq rose. Hong Kong's Hang Seng and mainland China's CSI 300 also gained. Overnight, U.S. stocks closed lower taking a breather from a rally sparked last week after the Federal Reserve stuck to its rate-cut forecast. The Dow lost 0.4%, while the S&P 500 and Nasdaq fell around 0.3% each.

Indian bonds on global indexes
Indian bonds are set to be added to global indexes which could be a gamechanger for the country. They'll be included in JPMorgan's bonds index in June and Bloomberg Index Services' in January next year. The move is expected to inject billions into India's rupee-denominated government debt and seen as a step in the right direction.

Apple's presence in China
Apple will likely double down on China's smartphone market, according to Wedbush Securities. The tech giant is in a tough spot in the country facing competition from Huawei amid sluggish iPhone sales. Apple needs to address the challenges before the iPhone 16 release and "it all starts with reaffirming Apple's presence in China," said Wedbush analysts.

Trump Media to start trading
The company behind former President Donald Trump's social media platform Truth Social, will start trading on Tuesday. Called Trump Media & Technology Group Corp., it will trade on the NASDAQ under the stock ticker symbol DJT. Trump, the  presumptive Republican presidential nominee, owns at least 58% of the company — that's worth $3 billion or more at Monday's share price. 

[PRO] Forget Nvidia?
Investors should look beyond Nvidia since the chipmaker's stock looks far too expensive. That's according to David Dietze, managing principal and senior portfolio strategist at Peapack Private Wealth Management. Instead, the veteran wealth manager is betting on four stocks in growth sectors that look "reasonably valued."

Inflation in the U.S. isn't coming down fast enough as price pressures persistently linger.

This has confounded even Fed officials who are closely watching for signs of progress.

The central bank should take a cautious approach to cutting interest rates to allow more time for inflation to slow down, Fed Governor Lisa Cook said Monday.

"The path of disinflation, as expected, has been bumpy and uneven, but a careful approach to further policy adjustments can ensure that inflation will return sustainably to 2% while striving to maintain the strong labor market," she said.

Torsten Slok, chief economist at Apollo Global Management, highlighted wage inflation as a problem, citing a gauge developed by the New York Fed.

"The New York Fed has constructed a new measure of trend wage inflation, which currently is running at 5%," he said in a note.

"Wage inflation at 5% is not consistent with the Fed's 2% inflation target," he added. "The Fed will keep interest rates higher for longer."

Some Fed officials don't even expect three rate cuts this year as the central bank has forecast at the last meeting.

Atlanta Fed President Raphael Bostic, scaled back his rate-cut projection last week, citing persistent inflation as a concern.

In a post on X, Diane Swonk, chief economist at KPMG, said Bostic "has made clear is he NOT convinced inflation will fall rapidly enough to cut rapidly in 2024."

"He has consistently pushed back against a first half cut for a second half cut, with more progress and said he currently favors one cut in 2024," versus two previously.

It remains to be seen whether the Fed will stick to its script on rate cuts or be forced to change course.