US stocks climb as inflation cools

The Dow Jones Industrial Average gained ground on Wednesday, buoyed by encouraging US inflation data.

The benchmark index rose 242 points, or 0.61 per cent, to close at 40,008.39. The broader S&P 500 added 0.38 per cent to finish at 5,455.21, extending its winning streak to five days. The Nasdaq Composite recovered from early losses to end slightly higher, up 0.03 per cent at 17,192.60.

Turning to US sectors, Financials was the best performer overnight, followed by Energy and then Technology. Three sectors finished in the red – Communications, Consumer Discretionary and Utilites.

In company news, Kellanova shares surged over 7.8 per cent after the company agreed to be acquired by snack maker Mars in a $36 billion deal. Alphabet, Google's parent company, saw its shares decline by 2.3 per cent amid reports of a potential government antitrust lawsuit. Casual dining restaurant, Brinker International saw its stock tumbled 11 per cent after disappointing earnings and a lowered profit outlook. Victoria's Secret surged 16 per cent after announcing new CEO and strong sales that exceeded guidance. Flutter jumped 9 per cent on better-than-expected revenue.

Consumer prices increased by 2.9 per cent year-over-year in July, down from 3 per cent in June and marking the lowest level since March 2021. The Bureau of Labor Statistics reported that prices edged up 0.2 per cent on a monthly basis, in line with economist expectations. Core inflation, which excludes volatile food and energy costs, also rose 0.2 per cent month-over-month.

The latest inflation figures follow Tuesday's softer-than-expected wholesale inflation data, which also supported market gains. Investors are keenly watching economic indicators to gauge the Federal Reserve's potential interest rate path.

Futures market pricing suggests a roughly equal chance of a quarter or half-percentage point interest rate reduction at the Fed's September meeting.

Turning to commodities, oil prices declined on Wednesday after the US reported a larger-than-expected build in crude inventories, raising concerns about a global surplus later this year. The unexpected increase in stockpiles overshadowed signs of strong gasoline and distillate demand.

Futures

The SPI futures are pointing to a 0.4 per cent gain.

Currency

One Australian dollar at 7.25am was buying 65.97 US cents.

Commodities

Gold has lost 1.12 per cent. Silver has fallen 1.61 per cent. Copper has lost 0.29 per cent. Oil has dropped 1.75 per cent.

Figures around the globe

European markets closed higher. London’s FTSE added 0.56 per cent, Frankfurt gained 0.41 per cent, and Paris closed 0.79 per cent higher.

Turning to Asian markets, Tokyo’s Nikkei added 0.58 per cent, Hong Kong’s Hang Seng lost 0.35 per cent, while China’s Shanghai Composite closed 0.60 per cent lower.

Yesterday, the Australian share market closed 0.30 per cent higher at 7850.70.

Ex-dividends
Dicker Data Limited (ASX:DDR) is paying 11 cents fully franked
Korvest Ltd (ASX:KOV) is paying 40 cents fully franked
Plato Inc Max Ltd (ASX:PL8) is paying 0.55 cents fully franked
Pacific Smiles Grp (ASX:PSQ) is paying 7 cents fully franked
Rio Tinto Limited (ASX:RIO) is paying 269.9817 cents fully franked
Reckon Limited (ASX:RKN) is paying 2.5 cents fully franked
Scentre Group (ASX:SCG) is paying 8.6 cents unfranked

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

Disclaimer

The views, opinions or recommendations of the commentators in this presentation are solely those of the author and do not in any way reflect the views, opinions, recommendations, of Sequoia Financial Group Limited ABN 90 091 744 884 and its related bodies corporate (“SEQ”). SEQ makes no representation or warranty with respect to the accuracy, completeness or currency of the content. Any prices published are accurate subject to the time of filming and shouldn’t be relied upon to make a financial decision. Commentators may hold positions in stocks mentioned and companies may pay FNN to produce the content at times. The content is for educational purposes only and does not constitute financial advice. Independent advice should be obtained from an Australian Financial Services Licensee before making investment decisions. To the extent permitted by law, SEQ excludes all liability for any loss or damage arising in any way including by way of negligence.
Copyright 2024 – Finance News Network