In the latest trading session, US benchmark equity indexes showcased a mixed performance as traders urged to navigate through a report that indicated consumer inflation rose as anticipated in July, yet the annual pace of price growth surprised many by slowing unexpectedly. The Dow Jones Industrial Average increased by 0.6%, reaching 40,007.4 by midday on Wednesday.
Concurrently, the S&P 500 edged up by 0.2% to 5,447.2, whereas the Nasdaq Composite experienced a slight decline of 0.2%, landing at 17,157.6. A notable characteristic of this trading session was the performance of various sectors, with financial stocks emerging as the top gainers, while communication services faced the steepest declines. On the economic front, new data revealed that the US consumer price index recorded a rise of 0.2% last month, following a marginal 0.1% decrease in June.
This information aligns with expectations as compiled by a Bloomberg survey. When assessed on an annual basis, inflation eased to 2.9% in July, marking the smallest uptick since March 2021. Analysts had anticipated the annualized metric to hold steady at a growth rate of 3%. Commenting on the current economic conditions, a note from TD to clients stated, "With clear signs of cooling in the labor market and a general subsiding of inflationary pressures, the Federal Reserve is in a position to confidently consider dialing back its policy rate in September." This sentiment follows a report released on Tuesday that indicated US producer prices increased by a lesser extent than market expectations during the previous month. In terms of treasury yields, the US two-year yield rose by 1.6 basis points to 3.96% intraday, while the 10-year yield fell by 2.4 basis points to 3.83%.
In the housing sector, mortgage applications surged to the highest level since January 2023, primarily driven by a boom in refinancing activities, as reported by the Mortgage Bankers Association. Turning to commodities, West Texas Intermediate crude oil prices slid by 1.2% intraday, priced at $77.38 a barrel. In corporate developments, Kellanova ($K) has accepted an all-cash acquisition offer from Mars, a renowned company in confectionery and pet food, with the deal totaling $35.9 billion, including taken-over net leverage.
Following this news, Kellanova's shares saw a significant jump of 7.7%, making it the top performer on the S&P 500 for the day. Additionally, Cardinal Health ($CAH) was noted among the leading gainer stocks on the S&P 500, climbing 4.5% after the drug distributor raised its full-year earnings outlook, based on surpassing fiscal fourth-quarter results which exceeded market projections. However, not all companies had positive news; Alphabet ($GOOGL, $GOOGL) saw its class A and C shares decline by over 3% each, marking some of the steepest drops on both the S&P 500 and Nasdaq.
Recent reports indicate the US Department of Justice is weighing options, including an initiative to break up the Google unit, following a court ruling that established the company's monopolization of the online search arena, according to unnamed sources cited by Bloomberg News on Tuesday. In the trading of precious metals, gold prices dipped by 1.1%, settling at $2,480.90 per troy ounce, while silver experienced a more substantial loss of 1.5%, priced at $27.36 per ounce..