US stocks opened higher on Tuesday as Wall Street digested cooler-than-expected inflation data and awaited an update on consumer prices. The S&P 500 (^GSPC) rose about 0.7%, while the tech-heavy Nasdaq Composite (^IXIC) jumped roughly 1%. The Dow Jones Industrial Average (^DJI) inched up around 0.4%.
The positive start to the trading day comes after the best three-day stretch for the Nasdaq Composite, Nasdaq 100 (NQ=F), and S&P 500, with each tracking four straight wins. This streak of gains is a welcome relief for investors after a period of volatility in the markets.
US producer prices, often seen as a signal for where consumer prices are heading, rose just 0.1% month-over-month in July, lower than economist forecasts. Year-over-year, the Producer Price Index (PPI) rose 2.2%, nearly in line with the Federal Reserve’s 2% target for inflation. This data suggests that inflation remains relatively stable, which could influence the Federal Reserve’s decision on interest rates.
The PPI release serves as a precursor to Wednesday’s reading on consumer prices, which will provide further insight into the health of the economy. Additionally, July’s retail sales reading, scheduled for Thursday, will offer a key indicator of consumer spending and confidence.
After a period of volatility, Wall Street is coming off a relatively calm day on Monday, with the S&P 500 and Nasdaq slowly recovering from recent losses. The market is cautiously optimistic as it continues to climb back towards previous highs.
In terms of earnings, Home Depot (HD) was a significant name on the docket for Tuesday. The home-improvement retailer’s shares fell after it cut its outlook on comparable same-store sales for the rest of the year. This news had an impact on the stock price and investor sentiment.
In other news, Starbucks (SBUX) stock surged over 15% following the announcement of CEO Brian Niccol’s departure to Chipotle (CMG). Chipotle shares, on the other hand, tumbled nearly 10% in response to the news. Additionally, Nvidia (NVDA) saw gains in early trading, building on positive momentum from the previous day.
Overall, the market is reacting positively to the cooler inflation data, with experts suggesting that it could pave the way for the Federal Reserve to consider rate cuts. This news has boosted investor confidence and contributed to the upward trend in stock prices.
As investors continue to monitor economic indicators and corporate earnings, the market remains dynamic and responsive to new developments. The coming days will provide further clarity on the state of the economy and the direction of the stock market.