4:15pm: Tech-led rally boosts Street
Wall Street was boosted by tech stocks yet again on Tuesday with all three major indices finishing well in positive territory.
At 4pm, the Dow Jones was up 1% at 39,766, the S&P 500 had gained nearly 1.7% at 5,434 and the Nasdaq surged 2.4% to close at 17,188 points.
“It feels like ‘back to normal’ for markets as tech stocks lead the way higher again following the lower US PPI data,” IG’s Chris Beauchamp commented.
“The reading has given heart to beleaguered investors, who remain skittish after last week’s volatility.
“Setting aside the carnage in the yen and the Nikkei, last week feels very much like a normal pullback in an otherwise strong year, and recession fears, like expectations of a more dramatic cut in rates, have been dialled back over the past few sessions.”
3:10pm: Starbucks surges
Shares of Starbucks Corp (NASDAQ:SBUX, ETR:SRB) surged almost 22% on the news the coffee chain has poached Chipotle Mexican Grill Inc (NYSE:CMG) CEO Brian Niccol to be its new chief executive.
Starbucks’ shares were up 21.9% just shy of $94 on Tuesday afternoon. Chipotle’s shares, on the other hand, fell 7% to $52.
Other major movers included CXApp, which surged almost 120% after the workplace technology company announced a multi-year strategic agreement with Google Cloud.
Chip stocks continued to rally, with Nvidia up 6.1% and Super Micro Computer added 4.8%.
1:30pm: Stocks climb on inflation relief
Stocks continued to climb early afternoon Tuesday as investors reacted to lower-than-expected inflation data.
The S&P 500 had gained 1.5% and the Nasdaq jumped 2.2%, while the Dow had added 0.8%.
This marked the best three-day run for the Nasdaq and S&P 500, both on track for four consecutive wins.
11:30am: Positive reactions
Market watchers had a positive reaction to this morning's PPI data.
"The runway is clear for the Fed to cut rates in September," Jamie Cox, managing partner at Harris Financial Group commented.
"If data like this persists, the Fed will have plenty of room to cut rates further this year."
Chris Zaccarelli, Chief Investment Officer, Independent Advisor Alliance is looking ahead to tomorrow's CPI release.
"If tomorrow’s CPI report comes in lower than expected, like this morning’s PPI report did, then the Fed truly has a green light to cut rates by 50 bps at their next meeting if they deem it necessary to quickly get back to neutral in the face of a looming slowdown in the economy."
9.49am: Stocks rally at open
Softer-than-expected wholesale inflation figures on Tuesday morning sent the Nasdaq, Dow Jones and S&P 500 up as the market opened.
The Nasdaq gained 1.3% after the opening bell, followed by 0.8% and 0.5% for the S&P 500 and Dow Jones respectively.
This came after July’s producer price index reading came in lower than expected, spelling positive news in terms of Federal Reserve rate cuts soon.
According to the Bureau of Labor Statistics, producer prices, which are a key measure of wholesale inflation, ticked up 0.1% over the month, against expectations for 0.2%, and slowed from 2.7% to 2.2% on an annual basis.
Pantheon Macroeconomics analysts noted the figures were “good enough for the Fed to start easing [rates] in September”.
Regional readings suggest price rises will continue to slow over the coming months too, Pantheon said, prompting further optimism for rate cuts ahead.
9.25am: Producer price index climbs less than expected
US producer prices, a key measure of wholesale inflation, climbed slower than forecasts in July, fuelling expectations that the Federal Reserve would soon cut interest rates.
The index climbed by 0.1% over the course of the month, according to Bureau of Labor Statistics data, and was flat when excluding volatile food and energy components.
Forecasts from economists polled by Dow Jones had been for a 0.2% increase, with the annual rate falling to 2.2% from 2.7% in June.
7.29am: Wall Street set for mixed start
Stocks are set to face a mixed start on Tuesday as investors continue to await inflation and retail sales data later this week.
Futures had the Dow Jones falling 56 points to 39,424 ahead of Tuesday’s opening bell, while the Nasdaq and S&P 500 were expected to tick up 38 and 6 points respectively.
This comes after the Dow Jones fell on Monday, as the Nasdaq and S&P 500 largely traded flat.
Richard Hunter, analyst at interactive investor, noted the muted start to the week could be “the calm before the storm” as investors wait in anticipation for consumer price index data on Wednesday, before retail sales figures on Thursday.
“Any readings above estimates [for inflation] could well lead to further volatility and concerns that the Federal Reserve has missed the boat in not cutting interest rates early enough, leading towards potentially recessionary territory,” he said.
“Similarly, the retail sales print on Thursday carries true weight given the importance of the consumer to US growth.”
The Home Depot Inc is among companies set to report on Tuesday, with producer price index data also due.