4:19pm: Target among Wednesday's best performers
The Dow closed Wednesday up 164 points, 0.5%, at 34,991, the Nasdaq Composite added 9 points, less than 0.1%, to 14,104 and the S&P 500 gained 7 points, 0.2%, to 4,503. The small-cap Russell 2000 ticked up 3 points, 0.2%, to 1,801.
As ever, interest rates were in focus. The 10-year US Treasury yield, which fell 18 basis points Tuesday added 9 basis points back Wednesday.
Investors also digested PPI data. The producer prices rose 1.3% on-year last month, cooling from a 2.2% increase registered in September, and well short of forecasts for a fall to 1.9%.
“Clearly, interest rates are the key driver of this stock market, and the activity today makes sense because PPI was very, very cool, as we had expected,” said Jay Hatfield, founder and CEO of Infrastructure Capital Advisors. “Today, rates are a little bit higher not because of PPI but because retail sales printed a little bit hot relative to expectations.”
Target was among the session's biggest winners. Its shares surged more than 17% after reported third-quarter earnings that beat forecasts, reflecting fewer markdowns and better inventory management.
12:00pm: US stocks hold gains after weak PPI figures
US stocks remained upbeat as weak wholesale prices data provided further evidence of easing inflationary pressures in the world's largest economy.
At midday, the Dow Jones Industrial Average was up 93.97 points, 0.3%, at 34,921.67, the S&P 500 was up 9.42 points, 0.2%, at 4,505.12 and the Nasdaq Composite was up 25.38 points, 0.2%, at 14,119.76.
Chris Beauchamp at IG said: "Better US PPI and retail sales figures have piled on the good news, helping equities around the globe to extend their gains."
"Investors continue to rejoice in the hope of no more Fed rate hikes, with UK traders cheered by this morning’s CPI drop too."
"Overall the skies have cleared dramatically for markets, and hopes of a soft landing and improved earnings have driven flows back into stocks.”
9:40am: US stocks advance as PPI falls more than forecast
US stocks opened higher as investors digested another favourable inflation reading and better-than-expected retail sales.
Shortly after the opening bell, the Dow Jones Industrial Average was up 99.42 points, 0.3%, at 34,927.12, the S&P 500 was up 17.39 points, 0.4%, at 4,513.09 and the Nasdaq Composite was up 63.42 points, 0.5%, at 14,157.80.
Retail sales fell 0.1% in October from the prior month, according to the Commerce Department, although the decline was better than the 0.3% drop which economists expected.
Ex-autos, sales rose 0.1% in October from September, after advancing 0.8% in September from August.
September’s figure was revised up to show a 0.9% rise, from 0.7%.
Elsewhere, annual US producer price growth was weaker than expected, reinforcing the disinflation narrative.
Producer prices rose 1.3% on-year last month, cooling from a 2.2% increase registered in September, and well short of forecasts for a fall to 1.9%.
On a monthly basis, producer prices fell 0.5% in October from September, again short of the 0.1% rise expected.
In company news, Target jumped 12% after earnings beat expectations although the retailer did see a drop in third quarter sales.
7:00am: Weak inflation data raises hopes for early rate cut
US stocks are expected to open higher, extending yesterday’s strong gains which followed a bigger than expected fall in inflation.
In pre-market trading, futures for the Dow Jones Industrial Average were up 0.3%, while those for the S&P 500 were 0.5% higher, and contracts for the Nasdaq 100 futures were up 0.6%.
Joshua Mahoney at Scope Markets said: “US markets look set for another bumper day, with falling inflation in both the US and UK helping to drive home expectations that the next move from the FOMC and BoE will be to cut rates rather than raise them. “
“The repricing of market expectations for a Fed hike in December or January has seen the 15% chance fall to a mere 1%, essentially ruling out any additional tightening.”
“With markets typically forward looking, investors and traders will invariably look at this as a prime time to be preparing their portfolios for the 2024 monetary easing that looks increasingly likely,” he said.
Today’s economic news sees retail sales figures which are expected to show a decline of 0.3% in October, following a 0.7% gain in September.
The US producer price index is forecast to have increased 1.9% from a year ago in October, a slower pace than the 2.2% September increase.
Investors will also be keeping an eye on political developments.
Late Tuesday, the House of Representatives passed a bill to avert a government shutdown. The measure will go to the Senate for a vote. If cleared by lawmakers, the legislation goes to President Joe Biden. Without a funding bill, the federal government is slated to shut down at the end of the week.