Stock Market Gains as Inflation Cools
The stock market saw a significant uptick today, with the Dow Jones Industrial Average closing above the milestone 40,000 mark. This was driven by fresh data indicating a slowdown in inflation, sparking optimism that the Federal Reserve might soon initiate a cycle of interest rate cuts.
Cooling Inflation Data
Recent reports show that the Consumer Price Index (CPI), which measures the average change in prices over time that consumers pay for goods and services, slowed to a 2.9% rate from the previous 3.0% in June. This was slightly below economists' predictions of 3%. When excluding volatile items like food and fuel, the "core" CPI rose by 3.2% over the previous year, also falling short of the expected 3.3%.
Such data supports the notion that the Federal Reserve's strategies to curb inflation through interest rate hikes are beginning to take effect, as noted by Jefferies in their recent analysis.
Corporate Moves and Market Impact
Intel Corporation saw its shares decline by more than 2% after it divested its 1.18 million shares in Arm Holdings, a British semiconductor firm. This move is part of Intel's broader strategy that includes reducing its workforce by over 15% and suspending dividends to focus on AI chips amidst changing market demands.
In contrast, shares of Kellanova surged nearly 8% amid news of its acquisition by Mars, a major player in the chocolate industry, at $83.50 per share.
Alphabet Inc, Google's parent company, experienced a 2% drop following reports that the U.S. Department of Justice is considering actions to curb Google's dominance in online search, which may include a potential breakup.
Earnings Highlights
Among the companies reporting earnings, Cardinal Health Inc rose nearly 4% after it surpassed analyst expectations with its fiscal Q4 results and subsequently raised its guidance for the full year.
This mix of economic data and corporate activities is shaping investor expectations and market strategies, signaling potential shifts in financial planning and wealth management approaches.
