Wall Street Closes Higher; Inflation Drives S&P 500 and Nasdaq to Record Highs
Investors were encouraged after the U.S. Consumer Price Index (CPI) rose 0.2% in July, down from 0.3% in June.
Quick overview
- All three major Wall Street indices closed higher on Tuesday, with the S&P 500 and Nasdaq reaching record highs.
- The Dow Jones Industrial Average gained 1.10%, while the S&P 500 rose 1.13% and the Nasdaq advanced 1.39%.
- Investors reacted positively to U.S. inflation data, which showed a lower Consumer Price Index increase than expected.
- The Mexican stock markets also closed higher, influenced by the same U.S. inflation data, with the S&P/BMV IPC index rising 0.57%.
The three major Wall Street indices closed higher on Tuesday. The S&P 500 and Nasdaq reached record highs following inflation data that supported bets on a Federal Reserve interest rate cut.
The Dow Jones Industrial Average, composed of 30 major companies, gained 1.10% to close at 44,458.61 points, while the S&P 500, which tracks the most valuable companies, rose 1.13% to 6,445.76 points. The Nasdaq Composite advanced 1.39% to 21,681.90 points.
Investors were encouraged after the U.S. Consumer Price Index (CPI) rose 0.2% in July, down from 0.3% in June. Over the 12 months through July, the CPI increased 2.7%, slightly below analysts’ expectations of 0.2% monthly and 2.8% annual growth.
Market Performance and Expectations
Federal funds futures, tracked by CME’s FedWatch tool, indicate a 94.4% probability that the Fed will cut interest rates by 25 basis points in its September meeting, lowering the target range to between 4.25% and 4.0%.
This data provided the relief and confirmation Wall Street had been waiting for, boosting expectations of a rate cut. Growing pressure from other Fed members on Jerome Powell makes this adjustment even more likely.
All 11 sectors of the S&P 500 finished the day in positive territory. Notable gains came from Communication Services (+1.81%) and Information Technology (+1.37%). On the Dow, shares of UnitedHealth (+3.65%) and Goldman Sachs (+3.36%) led the gains.
Mexican Stock Exchange
Mexico’s stock markets closed higher on Tuesday, led by gains in Volaris shares amid a session influenced by U.S. July inflation data.
The benchmark S&P/BMV IPC index, which tracks the most traded local stocks on the Mexican Stock Exchange (BMV), rose 0.57% to close at 58,675.04 points. Meanwhile, the FTSE BIVA index, representing the Institutional Stock Exchange (Biva), increased 0.50% to finish at 1,176.93 points.
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