Traders work on the floor of the New York Stock Exchange (NYSE) in New York City, U.S., July 12, 2023.
Brendan McDermid | Reuters
Stocks rose Thursday after another key inflation reading came in lighter than expected. This came after the S&P 500 closed at its highest level in over a year.
The S&P 500 climbed 0.5%, while the Dow Jones Industrial Average added 37 points, or 0.1%. The Nasdaq Composite advanced 1%.
Cybersecurity stock Palo Alto Networks jumped 4.6%, partially rebounding from Wednesday’s losses. Meanwhile, shares of MGM Resorts and Alphabet rose more than 4%.
June’s producer price index report rose less than anticipated, building upon optimism from Wednesday’s consumer price index data. The PPI, which measures what wholesalers pay for goods, rose 0.1% in June. Economists polled by Dow Jones had expected an increase of 0.2%. Core PPI, which strips out volatile food and energy prices, climbed 0.1% — also lower than expectations.
“The PPI confirmed the cooling inflation shown in yesterday’s CPI, but the lower-than-expected weekly jobless claims number was a reminder of continued labor market tightness,” said Mike Loewengart, head of model portfolio construction at Morgan Stanley Global Investment Office.
“For now, the stage appears to be set: The Fed is still on track to raise interest rates in a couple of weeks, and investors will shift their focus to corporate balance sheets as earnings season kicks into gear,” Loewengart continued.
Stocks surged Wednesday after a cooler-than-expected June consumer price index report eased some worries that the Federal Reserve may tip the economy into a recession as it fights to bring down sticky inflation.