U.S. Stocks Surge on July’s Inflation Data
(MENAFN) U.S. stocks surged on Tuesday following July’s inflation data, fueling expectations that the Federal Reserve might lower interest rates as soon as next month.
The Dow Jones Industrial Average climbed 483.52 points, or 1.1%, closing at 44,458.61. The S&P 500 rose 72.31 points, or 1.13%, ending at 6,445.76, while the Nasdaq Composite jumped 296.5 points, or 1.39%, to close at 21,681.9. Both the S&P 500 and Nasdaq marked record closing highs.
Every one of the 11 major S&P 500 sectors posted gains, with communication services leading at a 1.79% increase, followed by technology’s 1.41% rise. Consumer staples posted the smallest gain, inching up just 0.17%.
The U.S. Bureau of Labor Statistics revealed that the Consumer Price Index (CPI) rose 0.2% month-over-month in July and 2.7% year-over-year, slightly below the Dow Jones consensus estimate of a 2.8% annual increase.
Core CPI, which excludes volatile food and energy prices, increased 0.3% in July and 3.1% over the last 12 months. These figures closely matched forecasts of 0.3% monthly and 3.0% yearly gains, though the monthly core inflation rate was the highest since January.
Shortly after the inflation report’s release, U.S. President Donald Trump renewed his criticism of Federal Reserve Chair Jerome Powell and revealed he was contemplating authorizing a “major” lawsuit against Powell regarding renovations at the Fed’s headquarters.
According to the CME FedWatch Tool, the probability of a Fed rate cut in September surged to 93.4% on Tuesday, rising from 85.9% the previous day.
“It looks like a bit of Goldilocks right now for the stock market,” said Tom Hainlin, national investment strategist at U.S. Bank Asset Management Group. “More and more people are expecting a rate cut in September ... A pretty good environment for the broad stock market.”
In individual stocks, Intel surged over 5%, extending Monday’s 3% gain after CEO Lip-Bu Tan met with President Trump at the White House. Meta Platforms and Broadcom each climbed roughly 3%, while Microsoft, Apple, and Alphabet increased by more than 1%. Nvidia, Amazon, and Tesla also finished modestly higher.
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