Stocks gain as S&P 500 looks for record close above 6,400
Stocks gained on Tuesday following the release of the latest inflation data for the United States, with the Dow Jones Industrial Average jumping more than 500 points and both S&P 500 and Nasdaq Composite edging towards record highs.
- U.S. stocks inched higher as investors reacted to latest inflation data.
- The S&P 500 broke above 6,400 and looked to close above this mark for the first time ever.
- The Dow Jones Industrial Average and Nasdaq also rose.
The Dow Jones Industrial Average was up nearly 500 points, and the S&P 500 gained 1.1% to signal a fresh bullish flip for stocks.
As the blue chip and benchmark indices jumped, the market also saw the Nasdaq Composite add more than 1.3% to close in on fresh record closes above 6,400 and 21,600 respectively.
Stocks rise after CPI data
Wall Street surged after the Bureau of Labor Statistics released the consumer price index report, with inflation holding steady at 2.7% year over year.
The CPI reading showed price increases matched June numbers. However, “core” inflation, a measure that excludes the volatile food and energy costs, showed a 0.3% increase in July to 3.1% YoY, and above the 2.9% seen in June.
Despite the core CPI, optimism that the Federal Reserve will cut rates in September, helped stocks higher. Bets on the central bank cutting rates in September have jumped to odds of 94%.
The CPI reading aside, investors are likely to flip even more bullish with the next economic data release, with the producer price index set for reporting on Thursday, August 14, and retail sales data scheduled for the next day.
Other market factors
Corporate earnings and tariff related news remain notable factors for investors. President Donald Trump signing another 90-day pause on key tariffs on China has the market upbeat as a trade remains in the works.
The S&P 500’s rally to above 6,400 and Nasdaq’s march to a new peak has largely been catalyzed by gains for tech stocks.
Analysts have pointed to the benchmark index’s top 20 stocks rebounding by more than 40% since its bottom- compared to 27.9% for the rest of the companies. Top drivers for the outperforming tech stocks include the artificial intelligence sector, with AI helping Nvidia, Microsoft, Apple, and Alphabet among others to record significant gains.
