Stock market: Wall Street bounces and celebrates slowing US inflation

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MARKET OVERVIEW. The New York Stock Exchange welcomed a slowdown in US price gains in July with relief on Wednesday, ending significantly higher.

Canada’s main stock index ended the day with triple-digit gains on Wednesday, as US markets also rallied after the release of encouraging data suggesting inflation in the United States was finally starting to ease.

Consult market news (again).

Stock market indices at close of trading

In Toronto, the S&P/TSX rose 307.64 points (+1.57%) to 19,885.94 points.

In New York, the S&P 500 rose 87.77 points (+2.13%) to 4,210.24 points.

The Nasdaq rose 360.88 points (+2.89%) to 12,854.80 points.

The DOW rose by 535.10 points (+1.63%) to 33,309.51 points.

The loonie is up $0.0066 (+0.8548%) to hit $0.7828.

Oil rose $1.04 (+1.15%) to $91.54.

Gold fell $4.70 (-0.26%) to $1,807.60.

Bitcoin returned $597.73 (+2.58%) to $23,737.26.

the context

All sectors of the S&P 500 ended positively, particularly discretionary spending (+2.81%), as investors see the modest price decline as relief and a step in the right direction for consumer spending, which powers two-thirds of the US economy .

The positive market reaction was not just for equities, but also for oil, which also ended higher, driven by a return in enthusiasm for risky assets.

The dollar fell 1% against the major currencies as investors believe the Federal Reserve (Fed) may be less strict on rate hikes going forward amid what appears to be peaking in inflationary pressures.

US CPI price index was flat over a month in July and over a year at 8.5% versus 9.1% in June. The prices have prevailed mainly thanks to lower fuel costs.

“Today is a day when good news for consumers is seen as good news by the markets,” responded B. Riley Wealth’s Art Hogan.

Towards a less aggressive Fed?

The calming of inflation means the Fed is unlikely to be as aggressive as it was in the last two currency meetings,” he added, explaining the market’s “celebration”.

However, shortly after the release of inflation and the market’s positive reaction, Fed officials reminded that the Fed remains committed to containing inflation by tightening monetary policy.

For example, Minneapolis Fed’s Neel Kashkari reminded that “we were very, very far from declaring victory over inflation” and that the goal remains to bring it down to 2%.

Those words of caution did little to dampen investor enthusiasm, with a large majority (58%) now betting on a half-percentage-point rate hike by the Fed in September, rather than three-quarters of a point (0.75%) that it did was estimated the day before, according to futures.

10-year bond yields fell sharply immediately after inflation, falling as low as 2.72% before recovering to 2.79%.

Besides the action Tesla (TSLA) Soared 3.89% to $883.07 as boss Elon Musk sold nearly $7 billion of his shares, beating a “poker move” by the multi-billionaire that could, for example, anticipate compensation for the mutual takeover of Twitter Dan Ives, analyst previously at Wedbush Securities, to AFP.

Twitter (TWTR) also rose 3.74% to $44.43.

All the big names in technology have closed the gap, Meta (FB) (+5.82%) at Netflix (NFLX) (+6.16%) above Letters (GOOG) , Apple (AAPL) and Microsoft (MSFT) all took more than 2%.

Disney (DIS) ended up 3.98% at $112.43 before surging almost 6% in electronic trading after the close on the release of better-than-expected quarterly results and notably the contribution of 14.4 million additional subscribers.

The aircraft manufacturer Boeing (BA) Soared 2.53% to $169.02 after American Airlines announced it had received its first 787.

The US Federal Aviation Administration (FAA) said on Monday that Boeing had made the “necessary changes” to resume deliveries of its 787 Dreamliner after it had been completely grounded since May 2021 due to operational problems.

The action of the cryptocurrency exchange platform Coin Base (COIN) rallied 7.37% to $US94.14 the day after the release of disappointing second-quarter results that sent the price sharply lower. But the stock lost 1.36% after the close.

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