US stocks mostly up after data shows slightly lower inflation in July
NEW YORK: Wall Street stocks mostly gained following slightly better US consumer pricing data but an uptick in Treasury bond yields suggested lingering unease about inflation.
US stocks experienced an overall increase following slightly lower US consumer pricing data in July, according to a recent report. However, an increase in Treasury bond yields indicated that there is still some concern about inflation. US consumer inflation was reported to have slowed to 3.4% in July, matching expectations. This news provided the Federal Reserve with more flexibility to postpone potential interest rate hikes, despite inflation persisting above their targets.
The major indices mostly saw positive results throughout the day, driven by a surge in semiconductor shares following strong earnings reports from artificial intelligence (AI) companies like CoreWeave. Nonetheless, yields on US 10- and 30-year Treasury bonds rose after the Federal Consumer Price Index (CPI) report, suggesting that market participants are still anticipating continued inflation, as noted by Briefing.com analyst Patrick O'Hare.
O'Hare pointed out that the July US Treasury data, which showed a deficit of $432.3 billion, the highest monthly figure since 2021, serves as a reminder of the high bond supply. Markets are expected to analyze July data for wholesale inflation on Thursday, a crucial input for the Federal Reserve's outlook. Despite the gains in semiconductor and other companies, the Dow finished the session with a slight decline.
Markets in Paris, London, and Frankfurt closed marginally lower, largely due to declines in energy shares. Trading in London was characterized by caution rather than conviction, as investors remained preoccupied with the ongoing Middle East conflict and the uncertain situation regarding the Strait of Hormuz reopening. Paris-based IEA reported a sharp reduction in its forecast for global oil demand this year, with supplies constrained by the closure of the Strait of Hormuz and high prices deterring buyers.
Global oil demand is anticipated to decline by 1.6 million barrels per day compared to the IEA's July projection. The persistent closure of the Strait of Hormuz and higher fuel prices continue to impact oil consumption.
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