(New York) The New York Stock Exchange closed sharply higher on Tuesday as a first reassuring sign on the inflation front in the United States helped investors return in force to technology.
The Dow Jones index gained 1.04% to 39,765.64 points, the tech-heavy NASDAQ jumped 2.43% to 17,187.61 points and the S&P 500 advanced 1.68% to 5,434.43 points.
The producer price index (PPI), published on Tuesday, rose by only 0.1% in July compared to +0.2% in June. This slight increase was in line with market expectations.
Over the last 12 months, growth has slowed sharply, reaching 2.2%, the lowest since last March (2%).
This slowdown in wholesale prices “comes on top of signs of easing price pressures, which will help control inflation in the second half of 2024,” Oren Klachkin, economist at Nationwide Financial Markets, said of the PPI.
The consumer price index (CPI) for July will be released on Wednesday before Wall Street opens.
The CPI is even more closely followed by the market than wholesale prices.
“Inflation is moving in the right direction and wholesale inflation is good news because the PPI generally anticipates what’s going to happen next with consumer prices,” said Tom Cahill of Ventura Wealth Management.
“This suggests that the Fed is very likely to lower rates,” added the analyst interviewed by AFP.
The trajectory of producer prices confirms the hypothesis of a rate cut of at least 25 basis points at the next meeting of the Monetary Committee of the American central bank (Fed) on September 18.
Bond yields reacted downward, slipping to 3.93% against 4.01% the day before for two-year yields and to 3.84% against 3.90% on Monday for ten-year yields.
Starbucks posted its best trading session ever, rising 24.50% to $95.90.
In a dramatic decision, current CEO Laxman Narasimhan, who arrived in March 2023 to replace the historic leader of the coffee chain Howard Schultz, is abruptly leaving the group.
The brand has been suffering from a drop in activity for several months in a context of rising prices and pressure from shareholders.
A new leader, Brian Niccol, the boss of the Mexican fast food chain Chipotle, will take up his post in September.
The company’s stock, one of the market’s most dynamic stocks over the past year, took a hit, falling 7.50% to $51.68.
Home improvement chain Home Depot reported weaker-than-expected quarterly sales but higher profit.
The stock rose 1.23% to $350 as the prospect of Fed rate cuts could boost purchasing power and sales at the chain, which is forecasting higher annual revenue. Upscale rival Lowe’s also gained 2.21%.
On the NASDAQ, once again, mega-capitalizations led the race, such as Nvidia (+6.53% to $116.14), Apple (+1.72%) and Tesla (+5.24%), whose boss Elon Musk made headlines the day before by hosting a free-wheeling conversation with Republican presidential candidate Donald Trump on his X media.
Toronto Stock Exchange
Canada’s main stock index rose nearly 1%, helped by strength in the technology sector. Wall Street also rose, led by a 2.4% gain in the NASDAQ.
The S&P/TSX composite index rose 219.25 points to 22,618.18.
The Canadian dollar was trading at 72.87 US cents compared to 72.79 US cents on Monday.
Crude oil fell $1.71 to $78.35 a barrel and natural gas fell four cents to $2.15 per million BTU.
Gold rose $3.80 to $2,507.80 an ounce and copper fell two cents to $4.05 a pound.
The Canadian Press