US close: Stocks race higher as investors digest inflation figures

12th Sep 2024 00:54

(Sharecast News) - Despite an earlier wobble, US equity markets raced into positive territory on Wednesday as investors assessed a key inflation report and what it means for interest rates ahead of the Federal Reserve's meeting next week.

Markets were also still continuing to digest the previous evening's presidential debate, where Kamala Harris was widely seen as the victor in her contentious Q&A alongside Donald Trump.

The Dow finished just 0.3% higher after a late-afternoon rally into the black, but the S&P 500 jumped 1.1% and the Nasdaq surged 2.2%.

Inflation in focus

Wednesday's main event was August's consumer price index, which revealed that the rate of increase in the cost of living slowed sharply last month, as food inflation eased off and energy prices fell.

According to the US Department of Labor, the annual increase in the headline consumer price index slowed from 2.9% in July to a new three-year low of 2.5% for August. Economists had pencilled in a reading 2.6%.

Core consumer price gains, on the other hand, picked up a tad month-on-month, rising by 0.3% after a 0.2% gain previously. The annual rate of core inflation held steady at 3.2%.

Danni Hewson, AJ Bell's head of financial analysis, said the data "seems to have sealed the deal" for a rate cut from the Fed when it meets on 18 September.

"Market expectation according to the CME's FedWatch tool now sits at a whopping 85% for a 25 basis point cut, with only a handful now believing central bankers will cut deeper," Hewson said.

"The fact there is a degree of stickiness to core inflation has curbed expectations, with most investors now thinking the Fed will follow the Bank of England and take a cautious approach to unravelling tight monetary policy in a bid to prevent inflationary embers being stoked."

Elsewhere on the macro front, mortgage applications rose 1.4% in the week ended 6 September, according to the Mortgage Bankers Association of America, following a 1.6% increase in the previous week. Applications to purchase a home were up 2%, while refinance applications rose 1%.

Market movers

GameStop shares sank 12% after the video game retailer reported a big drop in second-quarter sales and announcing an "at-the-market" stock offering of up to 20m shares.

Trump Media & Technology was more than 10% lower, dropping to its lowest level since its March IPO in the aftermath of Tuesday's debate.

Meanwhile in the banking sector, Morgan Stanley was hit with a downgrade by Goldman Sachs to 'neutral', while Bank of America was hit by the news that Berkshire Hathaway cut its stake in the lender to 11%.

Dow Jones - Risers

American Express Co. (AXP) $254.18 3.57%

Intel Corp. (INTC) $19.64 3.48%

International Business Machines Corporation (CDI) (IBM) $209.89 2.23%

Microsoft Corp. (MSFT) $423.04 2.13%

Salesforce.Com Inc. (CRM) $249.57 1.39%

Apple Inc. (AAPL) $222.66 1.16%

Goldman Sachs Group Inc. (GS) $471.17 0.86%

JP Morgan Chase & Co. (JPM) $207.23 0.81%

Boeing Co. (BA) $161.33 0.79%

Cisco Systems Inc. (CSCO) $49.11 0.66%

Dow Jones - Fallers

Travelers Company Inc. (TRV) $231.30 -3.16%

Procter & Gamble Co. (PG) $173.92 -2.18%

Walgreens Boots Alliance, Inc. (WBA) $8.74 -1.58%

Unitedhealth Group Inc. (UNH) $589.75 -1.55%

Johnson & Johnson (JNJ) $164.82 -1.53%

Coca-Cola Co. (KO) $71.08 -0.66%

Merck & Co. Inc. (MRK) $114.71 -0.54%

Visa Inc. (V) $283.96 -0.48%

McDonald's Corp. (MCD) $290.23 -0.36%

Chevron Corp. (CVX) $137.88 -0.25%

S&P 500 - Risers

Albemarle Corp. (ALB) $89.30 13.58%

AES Corp. (AES) $17.86 8.64%

Nvidia Corp. (NVDA) $116.91 8.15%

Broadcom Inc. (AVGO) $158.27 6.79%

Norwegian Cruise Line Holdings Ltd (NCLH) $18.70 5.23%

Quanta Services Inc. (PWR) $263.09 5.22%

Starbucks Corp. (SBUX) $98.20 5.21%

KLA-Tencor Corp. (KLAC) $748.82 4.96%

Arista Networks Inc. (ANET) $342.93 4.95%

Advanced Micro Devices Inc. (AMD) $149.86 4.91%

S&P 500 - Fallers

Humana Inc. (HUM) $328.19 -5.26%

HF Sinclair Corporation (DINO) $44.42 -4.04%

ConAgra Brands Inc (CAG) $31.47 -4.03%

Kohls Corp. (KSS) $19.08 -4.02%

Whirlpool Corp. (WHR) $93.31 -3.99%

Carmax Inc. (KMX) $75.20 -3.24%

Travelers Company Inc. (TRV) $231.30 -3.16%

Marathon Petroleum Corporation (MPC) $158.61 -3.01%

Rollins Inc. (ROL) $49.63 -2.93%

Sysco Corp. (SYY) $76.21 -2.92%

Nasdaq 100 - Risers

Nvidia Corp. (NVDA) $116.91 8.15%

Broadcom Inc. (AVGO) $158.27 6.79%

Asml Holdings N.V. (ASML) $800.14 6.49%

Starbucks Corp. (SBUX) $98.20 5.21%

KLA-Tencor Corp. (KLAC) $748.82 4.96%

Lam Research Corp. (LRCX) $766.85 4.82%

Applied Materials Inc. (AMAT) $185.94 4.43%

Micron Technology Inc. (MU) $90.65 4.38%

Intel Corp. (INTC) $19.64 3.48%

Cadence Design Systems Inc. (CDNS) $264.72 3.47%

Nasdaq 100 - Fallers

Hologic Inc. (HOLX) $80.01 -2.38%

American Airlines Group (AAL) $10.77 -2.00%

Take-Two Interactive Software Inc. (TTWO) $152.34 -1.62%

Walgreens Boots Alliance, Inc. (WBA) $8.74 -1.58%

Liberty Global plc Series C (LBTYK) $19.90 -1.53%

O'Reilly Automotive Inc. (ORLY) $1,112.63 -1.49%

Liberty Global plc Series A (LBTYA) $19.56 -1.46%

DENTSPLY Sirona Inc. (XRAY) $24.73 -1.38%

Monster Beverage Corp (MNST) $49.65 -1.35%

Comcast Corp. (CMCSA) $38.68 -1.18%