NASDAQ 100, Dow Jones, S&P 500: Stronger as Inflation Eases, Optimistic Earnings

Highlights

• Stock market rallies on lower-than-expected inflation reading.
• Delta Air Lines, MillerKnoll, and PepsiCo experience notable stock movements.
• Investors anticipate corporate earnings reports amidst Federal Reserve’s interest rate decision.

Overview

Thursday is proving to be a positive day for the stock market as equities rallied following a key inflation reading that came in lower than expected. This positive momentum comes on the heels of the S&P 500 reaching its highest level in over a year, adding to the market’s optimism.

At 14:00 GMT, the blue chip Dow Jones is trading 34452.15, up 104.72 or +0.30%. The benchmark S&P 500 Index is at 4496.46, up 24.30 or +0.54% and the tech-weighted Nasdaq is trading 14050.13, up 131.17 or +0.94%.

PPI Grows Slower than Expected

The June producer price index (PPI) report provided a boost of confidence as it revealed a smaller-than-anticipated increase. The PPI, which measures the costs wholesalers pay for goods, rose by a modest 0.1% in June, falling short of economists’ expectations of a 0.2% rise. Similarly, the core PPI, which excludes volatile food and energy prices, also increased by 0.1%, lower than what was predicted.

This encouraging PPI report further supported the trend of cooling inflation observed in yesterday’s consumer price index (CPI) data. However, the weekly jobless claims numbers served as a reminder of the ongoing tightness in the labor market, highlighting the challenges that persist.

Looking ahead, the stage is set for the Federal Reserve to proceed with its plan to raise interest rates in the coming weeks. As this unfolds, investor attention will shift toward analyzing corporate balance sheets as earnings season kicks into high gear.

Delta Air Lines Soars with Record-Breaking Earnings

In company news, several notable stocks made significant moves. Delta Air Lines experienced a 0.8% increase in trading after reporting its highest-ever quarterly earnings and revenue. The airline operator surpassed analysts’ expectations with adjusted earnings per share of $2.68, exceeding the estimated $2.40. Additionally, Delta achieved adjusted revenue of $14.61 billion, surpassing the consensus estimate of $14.49 billion.

MillerKnoll Beats Earnings, but Shares Plunge

Conversely, furniture company MillerKnoll saw its shares fall by more than 5% in premarket trading, despite beating expectations for fiscal fourth-quarter earnings. Analysts had anticipated earnings of 39 cents per share on revenues of $946 million, but MillerKnoll posted adjusted earnings of 41 cents per share on revenues of $957 million.

PepsiCo Beats Expectations, Stock Rises

In the beverage sector, PepsiCo experienced a 0.7% increase in its stock after surpassing earnings and revenue expectations in its recent results and raising its full-year outlook. The company reported adjusted earnings of $2.09 per share, exceeding the consensus estimate of $1.96 per share. Additionally, PepsiCo reported revenue of $22.32 billion, surpassing the forecasted $21.73 billion.

Meta Platforms Surges as AI Model LLaMA Set to Take On Tech Giants

Meta Platforms, formerly known as Facebook, saw its stock rise by more than 1%. According to reports, Meta is poised to release a commercial version of its artificial intelligence model called LLaMA, positioning itself in competition with Microsoft and Alphabet. LLaMA, previously available only to researchers and academics, represents a significant step forward for Meta.

Short-Term Outlook:  Bullish on Lower Inflation, Rate Hike Expectations

In conclusion, the stock market experienced a surge as inflationary concerns remained subdued, and the focus shifted to the upcoming earnings season. While the Federal Reserve’s interest rate decision looms, investors eagerly await the release of corporate financial reports to gain insight into the overall health of companies. With notable developments across various industries, the market continues to navigate a dynamic landscape.