Major US indexes rise as investors await CPI and PPI reports

Major US indexes rose Tuesday, a day after the major averages snapped a three-session decline, as traders await the June consumer price index report set for release on Wednesday, as well as the June producer price index due out on Thursday.

Economists polled by Dow Jones expect the index rose 3.1 per cent last month on a year-over-year basis.

Investors have also pencilled in another quarter-point increase at the Federal Reserve’s July 25-26 meeting.

But they are undecided about what the central bank will do at its September meeting after last week’s continued robust jobs data raised concern that policymakers will revert to raising rates following the June pause.

The Dow Jones Industrial Average advanced 317.02 points, or 0.93 per cent, to close at 34,261.42. The S&P 500 rose 0.67 per cent to end at 4,439.26. The tech-focused Nasdaq Composite gained 0.55 per cent to 13,760.70.

Salesforce’s stock rose nearly 4 per cent after the company announced it would increase prices across the board in August. Activision Blizzard’s shares jumped 10.02 per cent after a federal judge denied the Federal Trade Commission’s request for a preliminary injunction to stop Microsoft’s acquisition of the video game company. The decision meant that the two companies were closer to completing their deal.

Second-quarter earnings season kicks off later this week with results from “systemically important financial institutions” such as JPMorgan Chase, Wells Fargo and Citigroup, plus BlackRock, PepsiCo and Delta Air. Dow component UnitedHealth reports Friday.

Hedge funds have significantly reduced their investments in the US stock market, reaching the lowest level in over a decade, and shifted their focus to European stocks due to concerns about the durability of the US tech-driven rally, according to prime brokerage data from Goldman Sachs.

In commodity-related news, countries are bringing home their physical gold reserves and increasing gold purchases as a hedge against inflation and protection against potential sanctions, with central banks globally making record purchases in 2022 and early 2023, as revealed by a survey of sovereign investors conducted by asset manager Invesco, where China and Turkey emerged as significant contributors to these acquisitions.

Investment in critical minerals, essential for clean energy goals, has surged by 30 per cent to over $40 billion, with China leading the spending, while diversification of supply sources for metals like lithium, nickel, and cobalt remains a concern, according to the International Energy Agency.

Rio Tinto (ASX:RIO) plans to intensify its search for hard rock lithium in the Western Australian outback, extending its exploration partnership near Sandstone for the third time in two years, as the mining giant aims to bolster its presence in the battery material market.

Overall, all US sectors closed higher except for Health, which was unchanged. Utilities was the best performer.

Futures

The SPI futures are pointing to a 0.5 per cent gain.

Currency

One Australian dollar at 7:25 AM was buying 66.88 US cents.

Commodities

Gold added 0.32 per cent. Silver lost 0.27 per cent. Copper fell 0.49 per cent. Oil gained 2.52 per cent.

Figures around the globe

European markets closed higher. London’s FTSE added 0.12 per cent, Frankfurt rose 0.75 per cent, and Paris closed 1.07 per cent higher.

Turning to Asian markets, Tokyo’s Nikkei added 0.04 per cent, Hong Kong’s Hang Seng gained 0.97 per cent and China’s Shanghai Composite closed 0.55 per cent higher.

The Australian sharemarket closed 1.50 per cent higher at 7109.

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Sources: Bloomberg, FactSet, IRESS, TradingView, UBS, Bourse Data, Trading Economics, CoinMarketCap.
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