NEW YORK, July 11 — Wall Street stocks pushed higher today, shrugging off data that showed increased inflation and a burgeoning trade controversy related to a French tax on large technology companies.
Analysts said sentiment remained strong after Federal Reserve Chair Jerome Powell signalled yesterday a possible interest rate cut. Powell is due for a second day of congressional testimony today.
About 25 minutes into trading, the Dow Jones Industrial Average was at 26,998.87, up 0.5 per cent.
The broad-based S&P 500 gained 0.2 per cent to 3,000.13, while the tech-rich Nasdaq Composite Index climbed 0.2 per cent to 8,218.23.
Hopes about a Fed interest rate cut have dominated discussion this week.
Data today showed consumer prices rose 0.1 per cent in June, above analyst forecasts. However, inflation has stayed tame over the past year, with consumer prices growth slowing to 1.6 per cent compared to June 2018, two tenths of a point lower than in May.
Powell cited weak inflation, along with trade-related uncertainty as factors that could compel the Fed to take action later this month to ensure the US economy stays strong. The comments were interpreted as opening the door to a rate cut.
Yesterday, officials said US President Donald Trump had ordered an investigation into France’s planned tax on internet services. The French parliament passed the tax anyway today, making Google, Apple, Facebook and Amazon principal targets of the higher taxes.
In spite of the move, shares of Amazon, Apple and Google parent Alphabet rose early today, while Facebook was narrowly negative.
Health insurer UnitedHealth Group surged 4.8 per cent and CVS Health leaped 6.8 per cent after the Trump administration spiked a plan to curb drug rebates offered by pharma companies to middlemen.
But pharma giants Merck and Pfizer were down about two per cent as the move still leaves them vulnerable to actions to curtail drug prices. — AFP