U.S. stocks ended nearly flat on Thursday after giving up early gains as investors tried to gauge if July inflation data, which showed lightly year-over-year growth in inflation, could make the Fed end its interest rate hikes. All three major indexes managed to end in positive territory.

How Did The Benchmarks Perform?

The Dow Jones Industrial Average (DJI) rose 0.2% or 52.79 points to close at 35,176.15 points.   

The S&P 500 gained less than 0.1 % or 1.12 points to end at 4,468.83 points after paring earlier losses. Consumer discretionary and communication services stocks gained on Thursday.

The Consumer Discretionary Select Sector SPDR (XLY) rose 0.2%, while the Communication Services Select Sector SPDR (XLC) gained a modest 0.3%. Six of the 11 sectors of the benchmark index ended in negative territory.

The tech-heavy Nasdaq climbed 0.1% or 15.97 points to finish at 13,737.99 points, after trading negative earlier in the session.

The fear-gauge CBOE Volatility Index (VIX) was down 0.69% to 15.85. A total of 11.82 billion shares were traded on Thursday, higher than the last 20-session average of 10.95 billion.

Investors Gauge July Inflation Data

Stocks ended modestly higher on Thursday in a volatile trading session that saw all three indexes climb more than 1% at their session highs, only to give up most of the gains. Investors were eagerly awaiting the July Consumer Price Index (CPI) reading, which came out on Thursday morning.

Fresh reading raised hopes that the Fed could soon end its interest rate hiking campaign as consumer prices increased a modest 0.2% in July. Also, Core CPI, which excludes the volatile energy and food prices, rose 0.2%, both in line with economists’ expectations.

On a year-over-year basis, CPI rose 3.2%, lower than the economists’ expectations of a rise of 3.3%. However, it came in higher than June’s reading of 3%, which is also the first escalation in more than a year.

Stocks are scrambling for direction as investors are still trying to gauge the Fed’s future course of action. Although many are hopeful that the central bank might soon end its interest rate hike campaign, the picture still isn’t clear.

Stocks initially rallied after the release of the July inflation data but the S&P 500 turned negative for a short time after Francisco Fed President Mary Daly said that there’s still “more work to do” to combat inflation.

Investors also kept track of a slew of companies that reported their quarterly results. Shares of The Walt Disney Company ((DIS Quick QuoteDIS - Free Report) ) jumped 4.9% after the company reported third-quarter fiscal 2023 adjusted earnings of $1.03 per share, beating the Zacks Consensus Estimate of $0.99 per share. The Walt Disney Company carries has a Zacks Rank #3 (Hold). You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here.

Shares of Wynn Resorts, Limited ((WYNN Quick QuoteWYNN - Free Report) ) gained 2.6% after the company reported second-quarter 2023 earnings of $0.91 per share, beating the Zacks Consensus Estimate of $0.51 per share.
Investors are now looking forward to the Producer Price Index reading scheduled for release on Friday morning.

Economic Data

In other economic data released on Thursday, the Labor Department reported that jobless claims totaled 248,000 for the week ending Aug 5, an increase of 21,000 from the previous week’s unrevised revised level of 227,000. The four-week moving average was 231,000, an increase of 2,750 from the previous week’s unrevised average of 228,250.

Continuing claims came in at 1,684,000, a decrease of 8,000 from the previous week’s revised level of 1,692,000. The 4-week moving average was 1,701,000 a decrease of 9,250 from the previous week's revised average of 1,710,250.