#StockMarket #ConsumerPriceIndex #RateCut
Market Update: Stocks React to Consumer Inflation Report
As the U.S. stock market continues to navigate the complexities of economic indicators, investors are keenly focused on the latest consumer price index (CPI) report for August. The S&P 500 and Nasdaq Composite have posted consecutive gains, with the S&P 500 rising nearly 0.5% and the Nasdaq Composite increasing by 0.8% on Tuesday. This upward momentum is largely attributed to a surge in Nvidia's stock, which saw a 3.5% increase following a 14% drop the previous week.
The Dow Jones Industrial Average, however, experienced a decline of 0.2%, primarily due to a drop in JPMorgan shares impacting the blue-chip index. This mixed performance underscores the market's sensitivity to economic data and the ongoing debate about the potential for rate cuts.
Rate Cut Expectations
Economists surveyed by Dow Jones forecast a 0.2% increase in the headline CPI from the previous month and a 2.6% rise compared to the same month last year. The CPI figures, along with Thursday's producer price index, could significantly influence the anticipated extent of a rate cut expected at the conclusion of the Federal Reserve's two-day meeting on September 18. Current trading in Fed funds futures indicates a 69% probability of a 25-basis-point cut and a 31% chance of a 50-basis-point reduction, as per CME's FedWatch Tool.
Market Insights
Kristina Hooper, Invesco's chief global market strategist, expressed her view on CNBC's "Closing Bell": "I believe we will likely see a 25-basis-point rate cut next week, as a 50-basis-point reduction would raise concerns and imply a sense of accountability." Hooper further remarked, "While I don't think that maintaining restrictive monetary policy for an extended period will cause irreparable harm, I do believe that every day we sustain these rates increases the likelihood of a recession." She suggested that central bankers may need to signal next week through their dot plot—depicting policymakers' rate projections—that further reductions could be forthcoming sooner rather than later.
Company Performance
In after-hours trading, GameStop's stock plummeted by 10% following the modification of an existing market sale agreement with the U.S. Securities and Exchange Commission, which permits the company to offer up to $1 million additional shares of its A common stock. This decline contrasts with the positive performance of other companies, such as Petco Health & Wellness, which saw a 4% surge in its shares after reporting second-quarter earnings that matched market expectations.
Market Outlook
As the market continues to digest the latest economic data, investors are closely watching for signs of a potential rate cut and its impact on the overall economy. The consumer and producer price index reports scheduled for release on Wednesday and Thursday, respectively, represent substantial data points that could dramatically impact market movements. These reports will also inform us whether the market can sustain its current momentum or if it will be influenced by the ongoing macroeconomic trends.
Original Article: https://www.cnbc.com/2024/09/10/stock-market-today-live-updates.html
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