Stock market today: Wall Street rallies after inflation cools
NEW YORK (AP) — Wall Street is climbing Wednesday after a report showed inflation cooled a bit more than expected last month, which hopefully takes some more pressure off the economy.
The S&P 500 was 1.1% higher in morning trading and on track for its seventh winning week in the last nine. The Dow Jones Industrial Average was up 272 points, or 0.8%, at 34,533, as of 10:30 a.m. Eastern time, and the Nasdaq composite was 1.4% higher.
The rally was widespread, and everything climbed from stocks of flashy Big Tech behemoths to banks to staid utility companies.
The U.S. government’s latest update on inflation showed that consumers paid prices for gasoline, food and other items that were 3% higher overall in June than a year earlier. That’s down from 4% inflation in May and a bit more than 9% last summer. Perhaps more importantly, it was a touch lower than economists expected.
High inflation has been at the center of Wall Street’s problems because it’s driven the Federal Reserve to jack up interest rates at a blistering pace. Higher rates undercut inflation by slowing the entire economy and hurting investment prices, and they've already caused damage to the banking, manufacturing and other industries.
“They’ll probably still pull the trigger on a hike, but it will be based on symbolism more than substance,” said Brian Jacobsen, chief economist at Annex Wealth Management. He pointed to another report earlier this month that showed a slowdown in U.S. jobs growth, which could also take some pressure off inflation.
Traders remain nearly convinced the Fed will raise the federal funds rate at its meeting in two weeks to a range of 5.25% to 5.50%, which would be its highest level since 2001. But expectations are also climbing for that to be the final increase for rates from...