6 days ago
Wall Street Ends Nearly Flat as Inflation Tops Expectations
U.S. stock markets finished almost unchanged.
A report showed that prices rose more than experts expected.
This made investors wonder what the Federal Reserve might do with interest rates.
The economy grew 1.5% in the second quarter.
Investors were also waiting for Nvidia's earnings report.
Nvidia is an important company for judging whether businesses still want artificial-intelligence technology.
Some company news moved individual stocks.
Intuit fell after giving a weaker revenue forecast, while Meta and J.M. Smucker rose.
Investors will also watch a speech by Fed Chair Kevin Warsh on Friday.
U.S. annual inflation rose 3.7% through July, above the 3.6% estimate.
The S&P 500 and Nasdaq slipped 0.01% and 0.06%, while the Dow fell 0.21%.
Investors awaited Nvidia's earnings for signs of continued artificial-intelligence demand.
The inflation data increased uncertainty about the Federal Reserve's September policy decision.
Intuit dropped after forecasting annual revenue below Wall Street expectations, while Meta and J.M. Smucker gained.
- Who
- U.S. investors, the Federal Reserve, Nvidia and other publicly traded companies.
- What
- Major U.S. stock indexes ended nearly flat after hotter-than-expected inflation data.
- Where
- Wall Street and the United States.
- When
- Wednesday; investors were also awaiting Nvidia's earnings later that day and a Federal Reserve speech on Friday.
- Why
- Higher-than-expected inflation raised uncertainty about Federal Reserve policy, while investors awaited Nvidia's results for clues about artificial-intelligence demand.
Inflation and Policy Concerns
Economic and Earnings Resilience
Federal Reserve outlook
Inflation and Policy Concerns
The 3.7% inflation reading could increase pressure on the Federal Reserve and raise uncertainty around its September decision.
Economic and Earnings Resilience
The reading was not considered sufficient by one strategist to change the balance for September, and additional data will be needed.
Market conditions
Inflation and Policy Concerns
High oil prices, government debt and inflation expectations have increased Treasury yields and the perceived risk premium.
Economic and Earnings Resilience
An investment strategist said there was no crisis and that the underlying economic environment and earnings at larger companies remained strong.
Artificial-intelligence demand
Inflation and Policy Concerns
A weaker-than-expected Nvidia report could renew doubts about whether the artificial-intelligence boom can continue.
Economic and Earnings Resilience
A strong Nvidia report could provide reassurance about demand for artificial-intelligence technology.
Key facts
- July annual inflation
- 3.7% in the 12 months through July, compared with a 3.6% estimate.
- Second-quarter growth
- The U.S. economy grew 1.5% in the second quarter.
- S&P 500 close
- 7,676.29, down 0.99 points, or 0.01%.
- Nasdaq Composite close
- 26,136.18, down 15.12 points, or 0.06%.
- Dow Jones close
- 53,463.88, down 113.52 points, or 0.21%.
- September rate-hike odds
- 38.1%, according to the CME FedWatch tool.
- Major company moves
- Intuit fell after its revenue forecast, while Meta and J.M. Smucker gained.
Quotes
Ellen Zentner
Chief economic strategist for Morgan Stanley Wealth Management
“It wasn't enough to shift the balance for September's meeting, but if subsequent data point in the same direction, the Fed may feel more pressure to move off the sidelines.”
livemint.com
Greg Tuorto
Head of U.S. small and midcap investing at Goldman Sachs Asset Management
“There is no crisis, it is more about expectations or guidance we are going to get from the Fed and what the Treasury is trying to do. That blends to some uncertainty and basically increases the risk premium.”
livemint.com
Sources
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