NEW YORK, July 28 — Wall Street opened higher today after data signalling easing inflation pressures added to hopes that the Federal Reserve’s policy tightening was ending, while chip stocks rose as Intel posted a surprise quarterly profit.
US annual inflation slowed considerably in June, likely pushing the Federal Reserve closer to ending its fastest interest rate hiking cycle since the 1980s.
In the 12 months through June, the PCE price index advanced 3.0 per cent. That was the smallest annual gain since March 2021 and followed a 3.8 per cent rise in May.
“Today’s PCE came in softer than expected to top off a full week chock full of economic data that all point to a higher probability of a soft landing,” said Gina Bolvin, president of Bolvin Wealth Management Group.
“In the wake of stronger-than-expected GDP, and a better-than-expected earnings season, this could be the catalyst to send the market to new highs.”
Market expectations of another 25 basis point rate hike in November were largely unchanged at 29.9 per cent after the data.
On the earnings front, Intel’s results and forecast pointed to an improving PC market, sending the chipmaker’s shares up 3.9 per cent.
Peers Nvidia and Marvell Technology gained over 1 per cent each.
Yesterday, the blue-chips Dow snapped its longest winning streak since 1987 as US Treasury yields pressured stocks after news that the Bank of Japan will allow long-term interest rates to rise.
The Bank of Japan made its yield curve control policy more flexible and loosened its defence of a long-term interest rate cap, in moves seen by investors as a prelude to an eventual shift away from massive monetary stimulus.
The yield on the US 10-year note slipped from 4 per cent hit in the previous session, boosting megacap growth and technology stocks.
All three major US indexes are on track to end the week marginally higher, supported by Big Tech earnings, hopes that the Fed’s monetary policy tightening was ending and the world’s largest economy was heading for a soft landing.
At 09.42am ET, the Dow Jones Industrial Average was up 169.45 points, or 0.48 per cent, at 35,452.17, the S&P 500 was up 37.05 points, or 0.82 per cent, at 4,574.46, and the Nasdaq Composite was up 201.79 points, or 1.44 per cent, at 14,251.90.
Ford Motor shed 3.9 per cent after Chief Executive Jim Farley outlined a change in the automaker’s product strategy, slowing the ramp-up of money-losing EVs.
Enphase Energy fell 9.9 per cent after the solar inverter maker’s third-quarter revenue forecast missed expectations, while Juniper Networks tumbled 6.6 per cent as the network operator forecast third-quarter revenue below market estimates.
Reata Pharmaceuticals surged 51.9 per cent after Biogen agreed to buy the rare disease drugmaker for nearly US$6.5 billion (RM29 billion).
Chevron shed 1.6 per cent after saying that its annual production forecast was near the low-end of its previously estimated range, while peer Exxon Mobil fell 2.7 per cent after the oil giant posted a 56 per cent slump in quarterly profit.
Procter & Gamble climbed 2.5 per cent after the consumer behemoth beat analysts’ estimates for quarterly sales.
Advancing issues outnumbered decliners by a 5.34-to-1 ratio on the NYSE and by a 4.04-to-1 ratio on the Nasdaq.
The S&P index recorded 10 new 52-week highs and two new lows, while the Nasdaq recorded 38 new highs and 25 new lows. — Reuters
