U.S. Stocks Rally Ahead Of Close Watched Inflation Data
10 Julho 2024 - 5:44PM
IH Market News
Following the lackluster performance seen in the previous
session, stocks moved sharply higher over the course of the trading
day on Wednesday. With the strong upward move, the S&P 500
closed above 5,600 for the first time ever.
The major averages saw further upside going into the close,
ending the day near their highs of the session. The Nasdaq surged
218.16 points or 1.2 percent to 18,647.45, the Dow shot up 429.39
points or 1.1 percent to 39,721.36 and the S&P 500 jumped 56.93
points or 1.0 percent to 5,633.91.
The rally on Wall Street was partly due to strength among
technology stocks, as reflected by the notable advance by the
tech-heavy Nasdaq, which also reached a new record closing
high.
The strength among tech stocks came after Taiwan Semiconductor
(NYSE:TSM) reported its second quarter sales surged much more than
expected.
Shares of Taiwan Semiconductor, which supplies chips for AI
giants like Nvidia (NASDAQ:NVDA) and Apple (NASDAQ:AAPL), spiked by
3.5 percent.
Stocks may also have benefitted from optimism about the outlook
for interest rates ahead of the release of closely watched consumer
price inflation data on Thursday.
Economists expect the annual rate of consumer price growth to
slow to 3.1 percent in June from 3.3 percent in May, while the
annual rate of core consumer price growth is expected to hold at
3.4 percent.
During congressional testimony, Federal Reserve Chair Jerome
Powell said more “good data” would strengthen the central bank’s
confidence inflation is moving sustainably toward its 2 percent
target and lead to a potential interest rate cut.
Powell also warned of the risk that leaving interest rates at an
elevated level for too long could jeopardize economic growth.
“In light of the progress made both in lowering inflation and in
cooling the labor market over the past two years, elevated
inflation is not the only risk we face,” he said. “Reducing policy
restraint too late or too little could unduly weaken economic
activity and employment.”
Sector News
Gold stocks showed a substantial move to the upside on day,
driving the NYSE Arca Gold Bugs Index up by 2.9 percent to its best
closing level in over two years. The rally by gold stocks came amid
an increase by the price of the precious metal.
Significant strength was also visible among semiconductor
stocks, as reflected by the 2.4 percent surge by the Philadelphia
Semiconductor Index. The index reached a new record closing
high.
Housing stocks also saw considerable strength over the course of
the session, resulting in a 1.9 percent jumped by the Philadelphia
Housing Sector Index.
Brokerage, biotechnology and pharmaceutical stocks also saw
notable strength on the day, moving higher along with most of the
other major sectors.
Other Markets
In overseas trading, stock markets across the Asia-Pacific
region turned in a mixed performance during trading on Wednesday.
Japan’s Nikkei 225 Index climbed by 0.6 percent, while China’s
Shanghai Composite Index slid by 0.7 percent.
Meanwhile, the major European markets have all moved to the
upside on the day. While the U.K.’s FTSE 100 Index advanced by 0.7
percent, the German DAX Index and the French CAC 40 Index both
jumped by 0.9 percent.
In the bond market, treasuries showed a lack of direction for
much of the day before closing modestly higher. As a result, the
yield on the benchmark ten-year note, which moves opposite of its
price, dipped 2.0 basis points to 4.280 percent.
Looking Ahead
Trading on Thursday is likely to be driven by reaction to the
Labor Department’s report on consumer price inflation and the
data’s impact on the outlook for interest rates.
SOURCE: RTTNEWS
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