The CPI report revealed that inflation finally began to slow in July, sending Wednesday's stock market sharply higher. Google-parent Alphabet, Nvidia, Amazon and Tesla led the way, all jumping more than 2%.
The Nasdaq composite rallied 2.7% while the S&P 500 gained 1.8%. The small-cap Russell 2000 index outperformed as well, lifting 2.5%. The Dow Jones Industrial Average lagged, rising 1.4%.
U.S. Stock Market Today Overview |
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|---|---|---|---|---|
| Index | Symbol | Price | Gain/Loss | % Change |
| Dow Jones | (0DJIA) | 33283.29 | +508.88 | +1.55 |
| S&P 500 | (0S&P5) | 4203.23 | +80.76 | +1.96 |
| Nasdaq | (0NDQC ) | 12819.19 | +325.26 | +2.60 |
| Russell 2000 | 194.98 | +4.79 | +2.52 | |
| IBD 50 | 29.50 | +0.76 | +2.64 | |
Last Update: 12:12 PM ET 8/10/2022 |
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Volume fell on the Nasdaq but rose on the NYSE vs. the same time on Tuesday.
Several IBD 50 stocks topped buy points amid broad-based buying interest. The Innovator IBD 50 ETF jumped 2.6%.
Stock Market Cheers Slowing Inflation
After hitting a 40-year high in June, investors cheered July's more subdued inflation numbers.
The consumer price index eased to an annual inflation rate of 8.5%, retreating from June's 9.1% print. Falling gas prices, retail discounting, e-commerce deflation and a plunge in shipping costs underscored the positive trend. Core prices, which exclude food and energy items, climbed 0.3% for the month and 5.9% year over year.
Economists expected the July CPI to climb 8.7% from a year ago and 0.2% from the previous month, according to Econoday. Core prices were forecast to rise 6.1% on a yearly basis and 0.5% month over month.
"One month doesn't make a trend, but at least headline is coming down and core stopped going up," Chris Zaccarelli, chief investment officer for Independent Advisor Alliance said. "If we see future months' data showing a decrease in inflation, then it will help markets see the end of the tunnel in terms of rate hikes."
The CME Group's FedWatch fell sharply after the news, dropping to less than 40% odds for a 75 basis point hike in September. On Tuesday, that probability was 68%.
The 10-year U.S. Treasury yield was flat at 2.76%. Crude oil prices eased down 0.7% to $90.14 per barrel.
All Major Sectors Advance
All 11 major S&P sectors gained, with materials, communications and consumer discretionary leading the way.
Wendy's shares dropped 2.5% after the fast-food restaurant chain beat earnings estimates and boosted its full-year earnings estimates. However, it missed Wall Street sales estimates.
Trade Desk reported earnings that met views and revenue that topped estimates. The digital advertising company gave guidance above expectations.
TTD has soared 34% in heavy volume. The stock is on pace for its largest percentage increase since August 10, 2018, when it rose 37.13%.
Albemarle rose 4% as materials stocks gained across the board. The Charlotte, N.C. global miner and refiner of lithium recently joined the Leaderboard after retaking a handle buy point.
A Monday breakout did not stick, but the stock climbed back above its buy point on Wednesday. As noted on a weekly MarketSmith chart, ALB pulled back mildly for one week. This presents a narrow handle with a 250.25 entry point.
Strong Earnings Prop Up Stock Market
Celsius Holdings led the IBD 50 with an 8% rally on heavy volume, lifting the stock toward November 2021's 110.32 buy point. The energy-drink maker reported second-quarter results that beat expectations. The bullish results follow a distribution and investment deal with PepsiCo.
Tesla gained 2.7% on Wednesday despite news that CEO Elon Musk sold nearly $7 billion worth of Tesla stock in recent days. Musk has now sold about $32 billion worth of shares in the EV maker. Tesla stock has met resistance at the 200-day moving average.
Still to come this week on the earnings calendar: Walt Disney and Tesla rival Rivian Automotive.
Follow Michael Molinski on Twitter @IMmolinski
