Wall Street moved closer to record territory on Thursday after fresh data suggested inflationary pressures continued to ease, with another decline in oil prices adding support, according to Business Today. The S&P 500 advanced 0.8%, putting it on course to surpass the record high it reached last week. As of 10:15 a.m. Eastern time, the Dow Jones Industrial Average had gained 185 points, or 0.3%, while the Nasdaq Composite was up 1%.
Inflation moderates
Investor sentiment improved after government data showed wholesale prices in the United States were 4.7% higher in the latest month compared with a year earlier, according to an AP report cited by Business Today. Although the pace of inflation remained elevated, it was lower than June's 5.5% reading and came in slightly below economists' expectations. A continued moderation in inflation could give the Federal Reserve greater room to delay raising interest rates, the report said, noting that higher borrowing costs help curb inflation but also slow economic activity by raising the cost of credit for households and businesses.
The latest wholesale inflation figures, arriving a day after softer consumer inflation data, have reduced expectations of an imminent rate hike. According to CME Group data cited by Business Today, traders now see only a 35% probability that the Fed will raise its benchmark interest rate at its September meeting, down from roughly 50% just two days earlier.
The probability of a September Fed rate hike fell to 35% from roughly 50% two days earlier, per CME Group data.
If the central bank does decide to raise rates, it would mark the first increase in more than three years, Business Today reported. Such a move could also draw criticism from President Donald Trump, who has been urging the Fed to lower interest rates.
Bonds and oil
The bond market reflected the changing expectations, with Treasury yields moving lower. The yield on the benchmark 10-year Treasury note declined to 4.61% from 4.68% at Wednesday's close and 4.72% on Monday. Even so, it remained well above the 3.97% level seen before the conflict with Iran drove oil and gasoline prices sharply higher.
Oil prices also retreated on Thursday, helping ease concerns over inflation. Brent crude fell 3.3% to $86.02 a barrel. Oil prices have remained highly volatile in recent weeks, Business Today noted, fluctuating between $72 and $102 a barrel in the previous month as optimism and pessimism over a possible resolution to the conflict repeatedly shifted expectations about when oil tankers could resume unrestricted movement through the Middle East and restore global crude supplies.
Stock movers
Real estate stocks were among the strongest performers on Wall Street, as falling interest rates and lower bond yields tend to make the dividend payouts offered by many real estate investment trusts (REITs) more appealing to investors. Lower mortgage rates could also encourage greater activity in the housing sector, Business Today reported.
| Company | Stock Move |
|---|---|
| AvalonBay Communities | +2.6% |
| Builders FirstSource | +3.4% |
| United Airlines | +1.7% |
| Carnival | +2.9% |
| Jack in the Box | +7.3% |
| Cisco Systems | -7% |
Apartment owner AvalonBay Communities gained 2.6%, while Builders FirstSource, a supplier of countertops and other construction materials, advanced 3.4%. The decline in oil prices also supported companies with significant fuel expenses by improving expectations that operating costs could ease. United Airlines rose 1.7%, while cruise operator Carnival added 2.9%.
Restaurant chain Jack in the Box climbed 7.3% after reporting quarterly earnings that exceeded analysts' expectations. Strong corporate earnings have been a key driver behind Wall Street's rally, as stock prices generally move in line with companies' long-term profit growth, the report said.
These gains helped offset weakness in Cisco Systems, whose shares fell 7% despite reporting quarterly revenue and profit that surpassed Wall Street forecasts. Analysts said investors appeared concerned about the company's future profit margins. Cisco's stock has also remained under pressure through the summer amid broader concerns that valuations across AI-related stocks had risen too rapidly, according to Business Today.
Global markets
Overseas, equity markets delivered a mixed performance across Europe and Asia, Business Today reported. The next milestone for investors is the Federal Reserve's September meeting, where traders now assign a 35% probability of a rate hike, according to CME Group data.
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