US stocks advanced on Tuesday after producer prices data showed abating inflation pressures. As of 11 am Eastern time, the Dow Jones Industrial Average was up 165 points, or 0.4 per cent, the S&P 500 was 1 per cent higher, and the Nasdaq Composite was 1.6 per cent higher.
At 9:35 a.m. ET, the Dow Jones Industrial Average rose 183.81 points, or 0.47 per cent, to 39,540.82, the S&P 500 gained 45.19 points, or 0.85 per cent, to 5,389.58 and the Nasdaq Composite gained 208.14 points, or 1.24 per cent, to 16,991.01.
The producer prices, the wholesale inflation, rose less than expected in July. Last month, the Producer Prices Index (PPI) grew 2.2 per cent after climbing 2.7 per cent in June. This data suggests that inflation pressures may be easing, which is positive news for the stock market.
On Wednesday, the US government will release the July data on consumer inflation. This will provide further insight into the state of inflation in the economy and how it may impact the stock market moving forward.
In the bond market, the yield on the 10-year Treasury fell to 3.86 per cent from 3.91 per cent late on Monday. Lower bond yields can be a positive sign for stocks, as it may indicate lower borrowing costs for companies and consumers.
Starbucks stock climbed 21.3 per cent after it announced that Chipotle Mexican Grill’s Brian Niccol will take over as chairman and chief executive next month. This leadership change could bring new opportunities for growth and innovation for the company.
Home Depot stock fell 0.5 per cent after the company forecasted a decline in annual profit and a bigger drop in its annual sales. This news may have contributed to the slight dip in the stock price.
Chipmaker Nvidia rose 5.2 per cent and was the strongest force pushing upward on the S&P 500. The company’s strong performance may be attributed to positive market sentiment and investor confidence in the tech sector.
BuzzFeed stock surged 10 per cent after the media company narrowed its net loss in the second quarter. This positive financial news likely boosted investor confidence in the company’s future prospects.
In the bullion market, gold prices dropped on Tuesday as investors booked profits after the metal closed at an all-time high in the previous session. Spot gold was down 0.2 per cent at $2,468.33 per ounce by 1259 GMT, while spot silver fell 1.1 per cent to $27.71 per ounce.
In the crude oil market, prices fell more than $1 a barrel on Tuesday as markets saw reduced risk of a wider war in the Middle East. Benchmark Brent crude futures were down $1.16, or 1.4 per cent at $81.16 a barrel, while US West Texas Intermediate crude was down $1.11, or 1.4 per cent, at $78.95 a barrel.
Overall, the positive performance of US stocks on Tuesday, driven by abating inflation pressures and positive company news, reflects a sense of optimism in the market. Investors will continue to monitor economic data and corporate earnings reports for further insights into the direction of the stock market.