On Wednesday, the U.S. benchmark equity indexes experienced a mostly positive session, as newly released data revealed that consumer inflation met expectations in July, while the annual pace of price growth demonstrated an unexpected deceleration. The Dow Jones Industrial Average saw an increase of 0.6%, climbing to 40,008.4 points.
The S&P 500 also made gains, advancing by 0.4% to reach 5,455.2. However, the Nasdaq Composite showed little movement, remaining relatively flat at 17,192.6 points. Among various sectors, financials led the upward charge, while communication services faced the most significant declines. In terms of economic indicators, the U.S.
consumer price index recorded a 0.2% increase last month, rebounding from a 0.1% decline in June, as reported by the Bureau of Labor Statistics. This latest figure aligned seamlessly with a survey compiled by Bloomberg. Year over year, inflation was reported at 2.9% in July, marking the mildest increase observed since March 2021.
The prevailing expectation had been that the annualized figure would remain stable at a 3% growth rate. "The labor market displays evident signs of cooling, combined with diminishing inflationary pressures, which affords the Federal Reserve the confidence necessary to initiate reductions to its policy rate come September," stated TD in a client note. Additionally, recent government data unveiled that U.S.
producer prices experienced growth that fell short of forecasts last month. Stifel noted in their Wednesday commentary that the cooler-than-anticipated annual CPI, alongside a month of declining producer price pressures, "further substantiates the case for a potential interest rate reduction in the near future." "Given the volatility and irregularity of the data, even amidst a general trend of improving conditions, any cuts to interest rates are likely to progress at a slow pace, possibly disillusioning investor expectations for a more rapid return to neutral policy, let alone aiming for an accommodating stance," the brokerage elaborated. In the bond market, the U.S.
two-year yield increased by two basis points, reaching 3.96%, while the 10-year rate decreased by 1.5 basis points, settling at 3.84%. Mortgage applications in the United States surged last week, reaching the highest level recorded since January 2023, primarily driven by a remarkable uptick in refinancing activities, as reported by the Mortgage Bankers Association. In commodity news, West Texas Intermediate crude oil prices fell by 1.5%, settling at $77.16 per barrel on Wednesday.
The Energy Information Administration reported that commercial crude stockpiles in the U.S. rose by 1.4 million barrels, totaling 430.7 million barrels in the week ending Friday, contrary to a consensus outlook predicting a decline of 2 million barrels, as per a Bloomberg poll. In corporate developments, Kellanova ($K) has reached an agreement to be acquired by Mars, a leading confectionery and pet food company, in an all-cash transaction valued at $35.9 billion, inclusive of net leverage.
Consequently, shares of the packaged food manufacturer surged by 7.8%, marking it as the best performer on the S&P 500. Similarly, Cardinal Health ($CAH) emerged among the top gainers on the S&P 500, rising 3.7% after the drug distributor revised its full-year earnings outlook in light of fiscal fourth-quarter results that surpassed market expectations. On the flip side, shares of Alphabet Inc.
($GOOGL, $GOOGL) class A and C experienced declines of over 2.3% each, making them some of the most substantial losers on the S&P 500 and the Nasdaq. Reports indicated that the U.S. Department of Justice is exploring avenues for potential action, including a move to break apart the tech giant's Google unit following a recent court ruling that identified monopolistic practices in the online search market. In terms of precious metals, gold prices slipped by 0.9%, trading at $2,486.20 per troy ounce, while silver prices also saw a decrease of 0.6%, standing at $27.63 per ounce..