US Stocks Advance After Lower-Than-Expected July Inflation Print

Last Updated: Wednesday, August 10, 2022 4:44 PM | MT Newswires

US stocks advanced Wednesday after a lower-than-expected flat monthly reading for July consumer prices.

The Dow Jones Industrial Average climbed 1.6% to 33,309.51, the Nasdaq Composite was up 2.9% to 12,854.81, and the S&P 500 was 2.1% higher at 4,210.24.

Materials and consumer discretionary led the gainers, with all sectors in the green.

Headline CPI was flat on a month-over-month basis, below the consensus estimate of a 0.2% increase and down from June's 1.3% growth, according to a research note from DA Davidson. While food prices were "slightly higher" from last month, energy fell 4.6%.

Core CPI, which does not include food and energy prices, rose by 0.3%, missing expectations for a 0.5% increase.

The target rate probability the Fed will lift interest rates by 75 basis points at its Sept. 21 policy meeting -- the third straight of the same magnitude this year -- fell to 43.5%, according to the CME FedWatch Tool by late Wednesday afternoon. On Tuesday, a day before the inflation data, that probability was perched at 68%. The chance of a 50 basis-point hike -- signaling a climbdown in policy stance -- in the forthcoming meeting is now over 56.5%.

The US 10-year yield dropped 1.4 basis points to 2.78%.

West Texas Intermediate climbed 1.2% to $91.54 a barrel. Total crude oil inventories rose by 200,000 barrels in the week ended Aug. 5, with commercial oil inventories up 5.5 million barrels and stocks in the US Strategic Petroleum Reserve down 5.3 million barrels. Gasoline inventories decreased last week while distillate oil stocks rose.

In company news, Walt Disney's (DIS) shares jumped 3.5% ahead of its fiscal third-quarter earnings report, the most on the Dow, before seeing its shares climbing 5.8% in after-hours trading. Disney reported fiscal third-quarter adjusted diluted earnings late Wednesday of $1.09, up from $0.80 a year ago. Analysts polled by Capital IQ expected $0.99. Revenue was $21.5 billion for the quarter ended July 2, up from $17.02 billion a year earlier. Analysts surveyed by Capital IQ expected $21 billion.

Gold was down 0.3% to $1,807.00 per troy ounce, and silver was up 0.4% to $20.57 per ounce.

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