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U.S. stocks ended sharply higher on Tuesday to nearly two-week high after softer-than-expected inflation data reinforced bets that the Federal Reserve will start its interest rate cuts in September. All three major indexes ended in positive territory.
How Did The Benchmarks Perform?
The Dow Jones Industrial Average (DJI) gained 1% or 408.63 points, to close at 39,765.64 points.
The S&P 500 rose 1.7% or 90.04 points, to finish at 5,434.43 points. Technology, consumer discretionary and communication services stocks were the biggest gainers.
The Technology Select Sector SPDR (XLK) jumped 3.1%. The Consumer Discretionary Select Sector SPDR (XLY) gained 2.5%, while the Communication Services Select Sector SPDR (XLC) rose 1.3%. Ten of the 11 sectors of the benchmark index ended in positive territory.
The tech-heavy Nasdaq jumped 2.4% or 407 points to finish at 17,187.61 points.
The fear-gauge CBOE Volatility Index (VIX) was down 12.51% to 18.12. Advancers outnumbered decliners on the NYSE by a 4.36-to-1 ratio. On the Nasdaq, a 2.59-to-1 ratio favored advancing issues.
Softer-Than-Expected Inflation Data Boosts Investors’ Confidence
Investors have been eagerly waiting for two major inflation data, the first of which was released on Tuesday. The producer price index (PPI), a measure of the selling prices that producers get for goods and services, increased just 0.1% month over month in July, lower than the consensus estimate of a rise of 0.2%.
Core PPI, which excludes the volatile food and energy prices, remained unchanged in July. Year over year, PPI increased 2.2%, a sharp decline from the 2.7% jump in June.
The rise in wholesale inflation was triggered by a 0.6% jump in the prices of goods, the biggest increase since February. Also, energy prices moved up 1.9%. However, the rise was offset by a 0.2% decline in services.
The PPI reading came a day before the key consumer price index reading, which will play an important role in the Federal Reserve’s future monetary policy. Markets are now pricing in a 50 basis point rate cut in September.
Stocks rallied on Wednesday following the release of the PPI data, which reinforced bets that the Fed will start it rate cuts from September.
Starbucks Corporation ((SBUX - Free Report) ) was the best performer on the S&P 500. The company’s shares surged 24.5% after the coffee giant appointed Chipotle Mexican Grill's ((CMG - Free Report) ) boss Brian Niccol as chairman and CEO.
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Stock Market News for Aug 14, 2024
U.S. stocks ended sharply higher on Tuesday to nearly two-week high after softer-than-expected inflation data reinforced bets that the Federal Reserve will start its interest rate cuts in September. All three major indexes ended in positive territory.
How Did The Benchmarks Perform?
The Dow Jones Industrial Average (DJI) gained 1% or 408.63 points, to close at 39,765.64 points.
The S&P 500 rose 1.7% or 90.04 points, to finish at 5,434.43 points. Technology, consumer discretionary and communication services stocks were the biggest gainers.
The Technology Select Sector SPDR (XLK) jumped 3.1%. The Consumer Discretionary Select Sector SPDR (XLY) gained 2.5%, while the Communication Services Select Sector SPDR (XLC) rose 1.3%. Ten of the 11 sectors of the benchmark index ended in positive territory.
The tech-heavy Nasdaq jumped 2.4% or 407 points to finish at 17,187.61 points.
The fear-gauge CBOE Volatility Index (VIX) was down 12.51% to 18.12. Advancers outnumbered decliners on the NYSE by a 4.36-to-1 ratio. On the Nasdaq, a 2.59-to-1 ratio favored advancing issues.
Softer-Than-Expected Inflation Data Boosts Investors’ Confidence
Investors have been eagerly waiting for two major inflation data, the first of which was released on Tuesday. The producer price index (PPI), a measure of the selling prices that producers get for goods and services, increased just 0.1% month over month in July, lower than the consensus estimate of a rise of 0.2%.
Core PPI, which excludes the volatile food and energy prices, remained unchanged in July. Year over year, PPI increased 2.2%, a sharp decline from the 2.7% jump in June.
The rise in wholesale inflation was triggered by a 0.6% jump in the prices of goods, the biggest increase since February. Also, energy prices moved up 1.9%. However, the rise was offset by a 0.2% decline in services.
The PPI reading came a day before the key consumer price index reading, which will play an important role in the Federal Reserve’s future monetary policy. Markets are now pricing in a 50 basis point rate cut in September.
Stocks rallied on Wednesday following the release of the PPI data, which reinforced bets that the Fed will start it rate cuts from September.
Tech stocks were the big gainers on Tuesday. Shares of Apple Inc. ((AAPL - Free Report) ) gained 1.4%, while Microsoft Corporation ((MSFT - Free Report) ) rose 1.8%. Apple has a Zacks Rank #3 (Hold). You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here.
Starbucks Corporation ((SBUX - Free Report) ) was the best performer on the S&P 500. The company’s shares surged 24.5% after the coffee giant appointed Chipotle Mexican Grill's ((CMG - Free Report) ) boss Brian Niccol as chairman and CEO.