US stocks mostly up on slightly lower inflation data
Wall Street stocks mostly gained following slightly better US consumer pricing data, but an uptick in US Treasury bond yields suggested lingering unease about inflation. US consumer inflation slowed to 3.4 percent in July from 3.5 percent the previous month, in line with analyst forecasts. Analysts said the report likely gives the US Federal Reserve more latitude to hold off on imminent interest…
US stocks saw mostly gains on slightly lower inflation data, according to the report from Wall Street. However, an increase in US Treasury bond yields indicated lingering concerns about inflation. The US consumer inflation slowed to 3.4 percent in July, matching the forecast of analysts. This report might give the US Federal Reserve more flexibility to delay potential interest rate hikes, despite inflation staying above the Fed's targets.
Major indices spent most of the day in positive territory, driven by a surge in semiconductor shares following strong earnings reports from CoreWeave and other artificial intelligence companies. Nevertheless, yields on the 10- and 30-year US Treasury bonds rose after the consumer price index (CPI) report, showing that market participants are still expecting inflation to persist, according to Briefing.com analyst Patrick O'Hare.
O'Hare pointed out that US Treasury data, which revealed the July deficit at $432.3 billion, the highest monthly figure since 2021, serves as a reminder of the high bond supply. US markets will have to deal with the July wholesale inflation data on Thursday, which is another critical input for the Fed's outlook. While the S&P 500 and Nasdaq both climbed, the Dow finished the session with a slight loss.
Paris, London, and Frankfurt closed marginally lower due to energy shares. Trading in London was characterized by caution rather than conviction, as investors remained focused on the ongoing Middle East conflict and the uncertain situation regarding whether the Strait of Hormuz would reopen. The International Energy Agency (IEA) recently lowered its forecast for global oil demand this year, as supplies remain restricted by the Strait of Hormuz's closure and high prices discourage buyers.
The IEA predicts demand to drop by 1.6 million barrels per day compared to its July forecast of a one million barrel drop. The continuous closure of the Strait of Hormuz and higher fuel prices continue to impact oil consumption, according to the Paris-based IEA.
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