Wall Street gains ground after inflation continues to ease

Stocks rose on Wall Street Friday and headed for their fourth weekly gain following a closely watched report that showed inflation continues easing. Investors are hoping that cooling inflation will prompt the Federal Reserve to start cutting interest rates, which remain at their highest level in more than 20 years. The S&P 500 index rose 0.2% and is on track to notch a fourth straight weekly gain and another all-time high. The Nasdaq composite rose 0.2% and is also on track to set a record. The Dow Jones Industrial Average rose 93 points, or 0.2%.

Quick Read

Wall Street Opens Higher as Inflation Eases:

• Market Performance:
• The S&P 500 increased by 0.3% in early trading.
• The Nasdaq composite rose by 0.2%.
• The Dow Jones Industrial Average added 177 points, or 0.4%.
• Positive Influences:
• Treasury yields declined following a report indicating easing inflation.
• The Federal Reserve may be inclined to cut interest rates, boosting market sentiment.
• Nike’s Impact:
• Nike shares dropped 17% due to weaker-than-expected sales and reduced full-year sales guidance.
• Other athletic apparel companies like Foot Locker, Skechers, and Under Armour also saw declines in off-hours trading.
• Economic Indicators:
• The personal consumption expenditures (PCE) index, the Fed’s preferred measure of inflation, showed a decrease, potentially influencing future rate cuts.
• U.S. economic growth was revised slightly higher to 1.4% annual pace for Q1 2024, indicating a slowdown but not a recession.
• Stock Market Gains: Stocks rose on Wall Street Friday, heading for their fourth weekly gain, after a report showed inflation continues to ease.
• Investor Sentiment: Investors hope cooling inflation will prompt the Federal Reserve to cut interest rates, which are currently at a 20-year high.
• Index Performance:
• The S&P 500 index rose 0.6%, aiming for a fourth straight weekly gain and a new all-time high.
• The Nasdaq composite increased by 0.8%, also on track to set a new record.
• The Dow Jones Industrial Average rose 185 points, or 0.5%.
• Inflation Data: The personal consumption expenditures index (PCE) showed consumer prices rose 2.6% in May compared to a year ago, down from 2.7% in April and significantly lower than the peak of 7.1% two years ago.
• Federal Reserve Outlook: The PCE data boosts optimism that the Fed may cut interest rates at its September meeting.
• Treasury Yields: Following the inflation report, the 10-year Treasury yield fell to 4.27% from 4.30%, and the two-year Treasury yield dropped to 4.67% from 4.72%.
• Nike’s Performance: Nike shares tumbled 18% after missing revenue targets and cutting full-year sales guidance, impacting other athletic apparel stocks.
• Foot Locker fell 4.2%, Skechers lost 1.6%, and Under Armour dropped 2.4%.
• Global Market Movements:
• European markets had mixed performances: France’s CAC 40 fell 0.4%, Germany’s DAX rose 0.6%, and Britain’s FTSE 100 increased by 0.5%.
• Asian markets mostly rose, with Japan’s Nikkei 225 up 0.6%, and South Korea’s Kospi up 0.5%.
• Commodity and Currency Updates:
• U.S. crude oil rose to $82.51 a barrel.
• Brent crude increased to $85.91 a barrel.
• The U.S. dollar slightly decreased against the Japanese yen and the euro.

The Associated press has the story:

Wall Street gains ground after inflation continues to ease

Newslooks- NEW YORK (AP) —

Stocks are edging higher in early trading on Wall Street and are heading for their fourth weekly gain in a row. Treasury yields pulled back in the bond market after a measure of prices that’s closely tracked by the Federal Reserve suggests that inflation is continuing to ease.

That augurs well for the Fed to deliver interest rate cuts. The S&P 500 was up 0.3% in the first few minutes of trading Friday. The Nasdaq composite rose 0.2% and the Dow Jones Industrial Average added 177 points, or 0.4%. Nike dropped 17% after reporting weaker-than-expected sales for its latest quarter.

Stocks rose on Wall Street Friday and headed for their fourth weekly gain following a closely watched report that showed inflation continues easing.

Investors are hoping that cooling inflation will prompt the Federal Reserve to start cutting interest rates, which remain at their highest level in more than 20 years.

The S&P 500 index rose 0.6% and is on track to notch a fourth straight weekly gain and a new all-time high. The Nasdaq composite rose 0.8% and is also on track to set a new record.

The Dow Jones Industrial Average rose 185 points, or 0.5%, as of 10:04 a.m. Eastern.

Consumer prices rose 2.6% in May compared with a year ago, according to the latest personal consumption expenditures index, or PCE. That signaled continued easing from a 2.7% reading in April and is sharply lower than the peak reading of 7.1% two years ago.

The PCE is the Fed’s preferred measure of inflation and the latest reading is encouraging for economists and investors who are hoping for rate cuts to help ease pressure on the market and borrowers. Wall Street is betting that the Fed will start cutting interest rates at its meeting in September.

Treasury yields pulled back in the bond market following the latest signal of easing inflation. The yield on the 10-year Treasury, which influences interest rates on mortgages and other consumer loans, fell to 4.27% from 4.30% just prior to the release of the PCE data. The yield on the two-year Treasury, which more closely tracks expectations for Fed actions, fell to 4.67% from 4.72% jut prior to the data’s release.

Nike tumbled 18% after the shoe and athletic wear company missed Wall Street’s revenue targets and cut its full-year sales guidance. Company executives said they expect sales to decline by single digits in the current fiscal year, citing a “challenging” environment.

Nike’s dour outlook dragged other athletic apparel companies down with it. Foot Locker fell 4.2%, Skechers lost 1.6% and Under Armour was down 2.4%.

Wall Street pointed toward a modestly higher open Friday ahead of a key report on inflation that could influence the Federal Reserve’s next decision on interest rates.

Futures for the Dow Jones Industrial Average gained 0.1% and futures for the S&P 500 rose nearly 0.4%.

Nike shares tumbled 15% after the shoe and athletic wear company missed Wall Street’s revenue targets and cut its full-year sales guidance. Company executives said they expect sales to decline by single digits in the current fiscal year, citing a “challenging” environment.

Nike’s dour outlook dragged other athletic apparel companies down with it. Foot Locker fell 5.7%, Skechers lost 3.7% and Under Armour was down 2.8% in off-hours trading.

The U.S. stock market has been listless this week in the lead up to Friday’s release of the next influential inflation report from the government. The personal consumption expenditures index, or PCE, is the Fed’s preferred measure of inflation.

Economists expect the report to show a modest easing of inflation to 2.6% in May, following a 2.7% reading in April. That’s down from the PCE’s peak of 7.1% in the middle of 2022. Other measures of inflation, including the consumer price index, have also eased significantly over the last two years.

The latest updates on inflation could influence the central bank’s decision on when to begin cutting interest rates, which remain at their highest level in more than 20 years and which are having an impact worldwide. Wall Street is betting that the central bank will start cutting interest rates at its September meeting.

An update from the government said the American economy expanded at a 1.4% annual pace from January through March. The figure is a slight revision from a prior estimate of 1.3%. It marks the slowest quarterly growth since spring 2022.

A slowdown in consumer spending could help further ease inflation, but too much of a slowdown could result in a more painful hit to the economy. The Federal Reserve is trying to time its efforts tame inflation back to its 2% target without slowing the economy so much that it slips into a recession.

France’s CAC 40 slipped 0.4% at midday trading in Europe, while Germany’s DAX added 0.6%. Britain’s FTSE 100 rose 0.5%.

In Asia, Japan’s benchmark Nikkei 225 rose 0.6% to finish at 39,583.08. Australia’s S&P/ASX 200 rose 0.1% to 7,767.50. South Korea’s Kospi edged 0.5% higher to 2,797.82. Hong Kong’s Hang Seng was little changed, inching up less than 0.1% to 17,718.61, while the Shanghai Composite surged 0.7% to 2,967.40.

In Japan, the government reported industrial production was stronger than forecast in May at 2.8% and the unemployment rate was unchanged from the previous month at 2.6%.

In energy trading, benchmark U.S. crude rose 77 cents to $82.51 a barrel. Brent crude, the international standard, added 65 cents to $85.91 a barrel.

In currency trading, the U.S. dollar fell to 160.63 Japanese yen from 160.77 yen. The euro cost $1.0701, down from $1.0704.

On Thursday, the S&P 500 edged up 0.1% and the Nasdaq composite added 0.3%. The Dow Jones Industrial Average rose 0.1%.

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