Equity rebound, Dow Jones, dollar vs. gold: Market takeaways
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Yahoo
21 minutes ago
- Yahoo
US stocks rally to records on hopes for cuts to interest rates
NEW YORK (AP) — The U.S. stock market rallied to records on Tuesday after data suggested inflation across the country was a touch better last month than economists expected. The S&P 500 rose 1.1% to top its all-time high set two weeks ago. The Dow Jones Industrial Average climbed 483 points, or 1.1%, and the Nasdaq composite jumped 1.4% to set its own record. Stocks got a lift from hopes that the better-than-expected inflation report will give the Federal Reserve leeway to cut interest rates at its next meeting in September. Lower rates would give a boost to investment prices and to the economy by making it cheaper for U.S. households and businesses to borrow to buy houses, cars or equipment. President Donald Trump has angrily been calling for cuts to help the economy, often insulting the Fed's chair personally while doing so. But the Fed has been hesitant because of the possibility that Trump's tariffs could make inflation much worse. Lowering rates would give inflation more fuel, potentially adding oxygen to a growing fire. That's why Fed officials have said they wanted to see more data come in about inflation before moving. Tuesday's report said U.S. consumers paid prices for groceries, gasoline and other costs of living that were overall 2.7% higher in July than a year earlier. That's the same inflation rate as June's, and it was below the 2.8% that economists expected. The report pushed traders on Wall Street to increase bets that the Fed will cut interest rates for the first time this year in September. They're betting on a 94% chance of that, up from nearly 86% a day earlier, according to data from CME Group. The Fed will receive one more report on inflation, as well as one more on the U.S. job market, before its next meeting, which ends Sept. 17. The most recent jobs report was a stunner, coming in much weaker than economists expected. Some economists warn that more twists and turns in upcoming data could make the Fed's upcoming decisions not so easy. Its twin goals are to get inflation to 2% while keeping the job market healthy. Helping one with interest rates, though, often means hurting the other. Even Tuesday's better-than-expected inflation report had some discouraging undertones. An underlying measure of inflation, which economists say does a better job of predicting where inflation may be heading, hit its highest point since early this year, noted Gary Schlossberg, market strategist at Wells Fargo Investment Institute. That helped cause some up-and-down swings for Treasury yields in the bond market. 'Eventually, tariffs can show up in varying degrees in consumer prices, but these one-off price increases don't happen all at once,' said Brian Jacobsen, chief economist at Annex Wealth Management. 'That will confound the Fed and economic commentators for months to come.' Other central banks around the world have been lowering interest rates, and Australia's on Tuesday cut for the third time this year. On Wall Street, Intel's stock rose 5.6% after Trump said its CEO has an 'amazing story,' less than a week after he had demanded Lip-Bu Tan's resignation. Circle Internet Group, the company behind the popular USDC cryptocurrency that tracks the U.S. dollar, climbed 1.3% despite reporting a larger loss for the latest quarter than analysts expected. It said its total revenue and reserve income grew 53% in its first quarter as a publicly traded company, which topped forecasts. On the losing side of Wall Street was Celanese, which sank 13.1% even though the chemical company delivered a better profit than expected. It said that customers in most of its markets continue to be challenged, and CEO Scott Richardson said that 'the demand environment does not seem to be improving.' Cardinal Health dropped 7.2% despite likewise reporting a stronger profit for the latest quarter than analysts expected. Its revenue fell short of forecasts, and analysts said the market's expectations were particularly high for the company after its stock had already soared 33.3% for the year coming into the day. Critics say the broad U.S. stock market is looking expensive after its surge from a bottom in April. That's putting pressure on companies to deliver continued growth in profit. All told, the S&P 500 rose 72.31 points to 6,445.76. The Dow Jones Industrial Average climbed 483.52 to 44,458.61, and the Nasdaq composite jumped 296.50 to 21,681.90. In stock markets abroad, indexes edged up in China after Trump signed an executive order late Monday that delayed hefty tariffs on the world's second-largest economy by 90 days. The move was widely expected, and the hope is that it will clear the way for a possible deal to avert a dangerous trade war between the United States and China. Japan's Nikkei 225 jumped 2.1%, and South Korea's Kospi fell 0.5% for two of the world's bigger moves. In the bond market, the yield on the 10-year Treasury rose to 4.28% from 4.27% late Monday. The yield on the two-year Treasury, which more closely tracks expectations for the Fed, fell to 3.73% from 3.76%. ___ AP Business Writers Yuri Kageyama and Matt Ott contributed.
CNBC
2 hours ago
- CNBC
Trump threatens Powell, Musk's App Store allegations, Cava earnings and more in Morning Squawk
Tuesday brought reasons for U.S. investors to celebrate. Stocks rallied as traders bet that the latest economic data — which showed that a measure of inflation rose less than expected in July — would give the Federal Reserve reason to start cutting interest rates. Those gains propelled the broad S&P 500 and technology-heavy Nasdaq Composite to close at record highs. The blue-chip Dow Jones Industrial Average, meanwhile, surged more than 480 points. Stock futures are higher on Wednesday morning. Follow live market updates here. Tuesday brought yet another development in President Donald Trump's feud with Fed Chair Jerome Powell. In the president's latest online broadside, Trump threatened to allow a "major lawsuit" over the Fed's renovation of its headquarters to go forward. He did not say when the suit could be filed, nor who would file it. Trump, who has been pressuring the Fed to cut interest rates for months, has centered his criticism mainly on the central bank's leader — who he's nicknamed "Too Late." Besides Powell, Trump also took aim at Goldman Sachs, telling CEO David Solomon to either replace the bank's chief economist over his tariff analysis or "just focus on being a DJ." (Solomon has performed at disk-jockey gigs around the world under the stage name "DJ D-Sol.") Trump wasn't the only one picking fights on Tuesday. Tesla CEO Elon Musk threatened to sue Apple over what he sees as antitrust violations tied to App Store rankings. Musk accused Apple of giving preference to OpenAI's ChatGPT platform over X's Grok chatbot. The allegation, as CNBC's Lora Kolodny reports, is as an escalation of Musk's ongoing feud with OpenAI CEO Sam Altman. But Altman punched back, calling Musk's comments a "remarkable claim" and accusing Musk of manipulating X for his personal benefit. Apple, for its part, denied Musk's allegations of bias in the App Store rankings. "The App Store is designed to be fair and free of bias," an Apple spokesperson said in a statement. It has been a rough quarter for fast-casual dining. Cava shares plummeted more than 20% in overnight trading after the Mediterranean restaurant chain posted weaker same-store sales growth than analysts anticipated. If that decline holds through Wednesday's session, it would mark the stock's worst day since it went public in 2023. The company wasn't alone this quarter: Other quick-service restaurants including Chipotle and Sweetgreen also missed Wall Street's expectations for same-store sales. These days, the yellow-brick road is lined with casinos. Sphere Entertainment said this week that it has sold more than 120,000 tickets for its immersive screenings of "The Wizard of Oz" that begin at the Las Vegas Sphere later this month. While CEO James Dolan acknowledged that the project wasn't a cheap undertaking, he called it "groundbreaking" and said it could rev up interest in the Sphere. Indeed, Dolan estimated that the viewings could help boost the share of Las Vegas visitors going to the Sphere to above 10%, from 7% currently. —
Yahoo
3 hours ago
- Yahoo
European shares forge ahead after record highs on Wall Street
Shares charged higher in Europe and Asia on Wednesday after US stocks hit new records when data that showed inflation across the United States improved slightly last month. Tokyo's benchmark Nikkei 225 added to its record set a day earlier. The future for the S&P 500 was up 0.2%, while that for the Dow Jones Industrial Average was little changed. A recent rally in share prices has been driven partly by relief over an extended truce in President Donald Trump's trade war with China, and partly by persisting hopes the Federal Reserve will cut interest rates. Those were reinforced by a moderation in the consumer price index in July. Germany's DAX rose 0.8% to 24,207.78 and the CAC 40 in Paris picked up 0.4% to 7,784.63. Britain's FTSE 100 edged 0.1% higher, to 9,157.26. Asian markets 'Asia woke up in full risk-on mode, riding the coattails of a US session that looked like someone hit the 'infinite bid' button after CPI didn't blow the inflation doors off,' Stephen Innes of SPI Asset Management said in a commentary. China and the US agreed to a 90 day extension, from 12 August, of their pause in drastically higher tariff rates on each others' exports to allow more time for talks on a broad trade agreement. Although uncertainty over what the negotiations will yield remains, the truce has relieved pressure on companies and countries across Asia that rely heavily in supply chains routed through China. Hong Kong's Hang Seng surged 2.6% to 25,613.67, while the Shanghai Composite index added 0.5% to 3,683.46. In Japan, relief over the Trump administration's confirmation that its exports will face a flat 15% US import duty has driven strong buying of computer chip-related companies and other exporters. The Nikkei 225 gained 1.3% to 43,274.67. Elsewhere in Asia, South Korea's Kospi advanced 1.1% to 3,224.37. In Australia, the S&P/ASX 200 shed 0.6% to 8,827.10. Taiwan's Taiex was up 0.9% and the Sensex in India gained 0.5%. In Bangkok, the SET climbed 1% after the Bank of Thailand cut its key interest rate by 0.25 percentage points to 1.5%. Related US inflation shows limited tariff impact, but prices still rise Russian stocks climb ahead of Trump-Putin summit on Friday US markets On Tuesday, the S&P 500 rose 1.1% to top its all-time high set two weeks ago. It closed at 6,445.76. The Dow Jones Industrial Average climbed 1.1% to 44,458.61, while the Nasdaq composite jumped 1.4% to set its own record of 21,681.90. The better-than-expected report on inflation raised hopes the Federal Reserve will have the leeway to cut interest rates at its next meeting in September. Tuesday's report said US consumers paid prices for groceries, gasoline and other costs of living that were overall 2.7% higher in July than in the previous year. That's the same inflation rate as June's, and it was below the 2.8% that economists expected. Lower rates would give a boost to investment prices and to the economy by making it cheaper for US households and businesses to borrow to buy houses, cars or equipment. President Donald Trump has angrily been calling for cuts to help the economy, often insulting the Fed's chair personally while doing so. The Fed has hesitated, worried that Trump's tariffs could make inflation much worse. The Fed will get one more report on inflation and another on the US job market, before its next meeting, which ends 17 September. The most recent jobs report was a stunner, coming in much weaker than economists expected. Critics say the broad US stock market is looking expensive after its surge from a bottom in April. That's putting pressure on companies to deliver continued growth in profit. In other dealings early Wednesday, US benchmark crude oil dropped 26 cents to $62.91 per barrel. Brent crude, the international standard, declined 20 cents to $65.92 per barrel. The U.S. dollar fell to 147.24 Japanese yen from 147.84 yen. The euro climbed to $1.1727 from $1.1677. Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
