Wall Street Rises, Cold CPI a Breath of Fresh Air
US stocks rose at the opening of trading on Tuesday (July 14th) after lower-than-expected June inflation data came out. Market sentiment improved as the lower inflation figures eased concerns that the Fed would soon raise interest rates.
The S&P 500 index rose 0.3%, while the Nasdaq Composite gained 0.6%. The Dow Jones Industrial Average added 76 points, or 0.2%, supported by a 6% rise in Goldman Sachs shares after posting better-than-expected earnings.
The US Consumer Price Index (CPI) fell 0.4% month-on-month in June, bringing annual inflation down to 3.5%. This figure was lower than economists' forecasts, which had previously estimated the CPI to fall 0.2% month-on-month and annual inflation at 3.8%.
Following the release of the data, expectations for a Fed rate hike in July also declined. According to the CME FedWatch Tool, the probability of a rate hike at the July meeting fell to 17%, from 42% the previous day.
However, the market hasn't completely abandoned its interest rate concerns. Traders still see a 63% chance that the Fed will raise rates in September, either by 25 basis points or 50 basis points.
Wall Street's gains are also being held back as investors refocus on rising oil prices and await comments from Fed Chairman Kevin Warsh. If oil continues to strengthen, the risk of energy inflation could again loom over the market, even though the latest CPI data indicates price pressures are easing. (arl)
Source: Newsmaker.id
