NASDAQ 100, Dow Jones, S&P 500 News: Higher as Inflation Data Signals Rate Hike Pause

Highlights

• August inflation at 0.6%, yearly rate hits 3.7%.
• Energy prices rise, but expected to stay range-bound.
• Wall Street anticipates a rate-hold in September.

Federal Reserve Rate Decision Looms Amid August Inflation Data

The markets showed optimism on Wednesday as data unveiled a moderate uptick in consumer prices for August. This instills hope that the Federal Reserve may keep interest rates unchanged in their upcoming September gathering. Specifically, the August consumer price inflation witnessed a 0.6% monthly rise, aligning with expert forecasts. However, its yearly counterpart increased to 3.7%, slightly surpassing expectations. A notable surge in gasoline prices marked this period, cresting at $3.984 per gallon by August’s third week.

At 14:47 GMT, the Dow Jones Industrial Average is up 37.79, points, or 0.11%, at 34,683.78, the S&P 500 is up 6.90 points, or 0.15%, at 4,468.80, and the Nasdaq Composite is up 32.65 points, or 0.24%, at 13,806.26.

Energy Prices Drive Inflation but Stay Range-Bound

Gasoline’s notable price hike, a jump from $3.676 in July, is emblematic of broader inflationary pressures. Yet, the prevailing sentiment is that monthly numbers seem more like temporary fluctuations than definitive trends. Current indicators suggest that underlying energy prices, a significant contributor to inflation, will likely remain within a certain bracket in the coming times. Despite some concerns, core CPI (excluding unstable entities like food and energy) rose by 0.3%, making it an essential figure for Federal Reserve officials as they assess long-term inflation trajectory.

Wall Street Anticipates Rate Pause Amid Economic Signals

A prevailing consensus in Wall Street indicates a probable hiatus in rate hikes during the Federal Reserve’s imminent session. With the CME FedWatch Tool estimating a 97% chance of a rate standstill, this sentiment resonates with the market pulse. Vincent Reinhart, a distinguished economist at Dreyfus and Mellon, opined that any Federal Reserve action, if at all, will likely manifest in November.

Key Stock Movements and Upcoming Data Releases

In the realm of stocks, megacap growth equities showcased a mixed bag. Tesla and Meta Platforms saw rises of 1.9% and 1.2% respectively, while tech giants Apple and Alphabet slipped slightly. Market participants now keenly await data on August’s producer prices and retail sales, set for release on the eve of the Federal Reserve’s pivotal policy determination on September 20.

Outlook: Bullish Short-Term with Eyes on the Federal Reserve

The market currently tilts bullish, primarily driven by expectations of the Federal Reserve’s rate decisions. Furthermore, the broader performance of key stocks and economic indicators will continue to shape market trajectories in the upcoming weeks.