We use cookies to understand how you use our site and to improve your experience. This includes personalizing content and advertising. To learn more, click here. By continuing to use our site, you accept our use of cookies, revised Privacy Policy and Terms of Service.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
Wall Street closed mixed on Wednesday on the interpretation of the August inflation numbers. The yield on the U.S. 10-year treasury note fell in anticipation of the Fed not raising interest rates in its September meeting. Two of the three major stock indexes ended in the green, while one ended in red.
How Did the Benchmarks Perform?
The Dow Jones Industrial Average (DJI) fell 0.2% or 70.46 points to close at 34,575.53. Sixteen components of the 30-stock index ended in negative territory, while 14 ended in positive.
The tech-heavy Nasdaq Composite gained 39.97 points or 0.3% to 13,813.59.
The S&P 500 rose 0.1%, or 5.54 points, to end at 4,467.44. Six of the 11 broad sectors of the benchmark index closed in the green. The Utilities Select Sector SPDR (XLU), the Consumer Discretionary Select Sector SPDR (XLY) and the Communication Services Select Sector SPDR (XLC) gained 1.2%, 0.8% and 0.3%, respectively, while the Real Estate Select Sector SPDR (XLRE) slid 1%.
The fear-gauge CBOE Volatility Index (VIX) decreased 5.3% to 13.48. A total of 9.9 billion shares were traded on Wednesday, in line with the last 20-session average. Decliners outnumbered advancers on the S&P 500 by a 1.5-to-1 ratio.
CPI Numbers Come in High But Match Expectations
The U.S. Bureau of Labor Statistics reported on Wednesday that the Consumer Price Index (CPI) rose 0.6% in August on a seasonally adjusted basis after increasing 0.2% in July. Over the last 12 months, the all items index increased 3.7% before seasonal adjustment. The headline CPI rising 0.6% is its biggest monthly gain in 2023. Energy prices drove much of this gain, rising 5.6% for the month. This follows a 10.6% surge in gasoline prices for the period.
The index for all items less food and energy, better known as core CPI, rose 0.3% in August, following a 0.2% increase in July.
The jump in headline inflation had a direct impact on worker paychecks. Real average hourly earnings declined 0.5% for August, the Labor Department said in a separate report.
This data comes at a significant juncture as the Fed officials have repeatedly stated that they are looking for a long-term solution to the inflation problem. Beginning in March 2022, the Fed has hiked its borrowing rate to the level of 5.00-5.25 percentage points in an effort to tackle inflation that was running at a more than four-decades high level in the summer of 2022.
Off late, Fed officials have indicated a more cautious approach ahead. Inflation numbers have come in high but are within expectations as fuel prices were fast rising in the period. At this point, it is almost a given that the Fed will keep the interest rates at their current level in the September FOMC meeting and will not be deterred by the CPI numbers.
10-Year Treasury Yield Edges Lower
Treasury yields edged lower on Wednesday, suggesting that the Fed is expected to keep interest rate hikes on hold next week despite the biggest increase in U.S. consumer prices in a year. The yield on the benchmark 10-year note was down 2.5 basis points at 4.239% compared to 4.264% late on Tuesday. When treasury yields go down, generally, mega-cap growth stocks have a day of gains.
Per a government report, in the week ending Sep 8, 2023, U.S. commercial crude oil inventories (excluding those in the Strategic Petroleum Reserve) increased by 4.0 million barrels from the previous week. In the previous week, the inventory had fallen by 6.3 million barrels.
See More Zacks Research for These Tickers
Normally $25 each - click below to receive one report FREE:
Image: Bigstock
Stock Market News for Sep 14, 2023
Wall Street closed mixed on Wednesday on the interpretation of the August inflation numbers. The yield on the U.S. 10-year treasury note fell in anticipation of the Fed not raising interest rates in its September meeting. Two of the three major stock indexes ended in the green, while one ended in red.
How Did the Benchmarks Perform?
The Dow Jones Industrial Average (DJI) fell 0.2% or 70.46 points to close at 34,575.53. Sixteen components of the 30-stock index ended in negative territory, while 14 ended in positive.
The tech-heavy Nasdaq Composite gained 39.97 points or 0.3% to 13,813.59.
The S&P 500 rose 0.1%, or 5.54 points, to end at 4,467.44. Six of the 11 broad sectors of the benchmark index closed in the green. The Utilities Select Sector SPDR (XLU), the Consumer Discretionary Select Sector SPDR (XLY) and the Communication Services Select Sector SPDR (XLC) gained 1.2%, 0.8% and 0.3%, respectively, while the Real Estate Select Sector SPDR (XLRE) slid 1%.
The fear-gauge CBOE Volatility Index (VIX) decreased 5.3% to 13.48. A total of 9.9 billion shares were traded on Wednesday, in line with the last 20-session average. Decliners outnumbered advancers on the S&P 500 by a 1.5-to-1 ratio.
CPI Numbers Come in High But Match Expectations
The U.S. Bureau of Labor Statistics reported on Wednesday that the Consumer Price Index (CPI) rose 0.6% in August on a seasonally adjusted basis after increasing 0.2% in July. Over the last 12 months, the all items index increased 3.7% before seasonal adjustment. The headline CPI rising 0.6% is its biggest monthly gain in 2023. Energy prices drove much of this gain, rising 5.6% for the month. This follows a 10.6% surge in gasoline prices for the period.
The index for all items less food and energy, better known as core CPI, rose 0.3% in August, following a 0.2% increase in July.
The jump in headline inflation had a direct impact on worker paychecks. Real average hourly earnings declined 0.5% for August, the Labor Department said in a separate report.
This data comes at a significant juncture as the Fed officials have repeatedly stated that they are looking for a long-term solution to the inflation problem. Beginning in March 2022, the Fed has hiked its borrowing rate to the level of 5.00-5.25 percentage points in an effort to tackle inflation that was running at a more than four-decades high level in the summer of 2022.
Off late, Fed officials have indicated a more cautious approach ahead. Inflation numbers have come in high but are within expectations as fuel prices were fast rising in the period. At this point, it is almost a given that the Fed will keep the interest rates at their current level in the September FOMC meeting and will not be deterred by the CPI numbers.
10-Year Treasury Yield Edges Lower
Treasury yields edged lower on Wednesday, suggesting that the Fed is expected to keep interest rate hikes on hold next week despite the biggest increase in U.S. consumer prices in a year. The yield on the benchmark 10-year note was down 2.5 basis points at 4.239% compared to 4.264% late on Tuesday. When treasury yields go down, generally, mega-cap growth stocks have a day of gains.
Consequently, shares of Tesla, Inc. (TSLA - Free Report) and Meta Platforms, Inc. (META - Free Report) gained 1.4% and 1.1%, respectively. Each carries a Zacks Rank #3 (Hold). You can see the complete list of today's Zacks #1 Rank stocks here.
Economic Data
Per a government report, in the week ending Sep 8, 2023, U.S. commercial crude oil inventories (excluding those in the Strategic Petroleum Reserve) increased by 4.0 million barrels from the previous week. In the previous week, the inventory had fallen by 6.3 million barrels.