Nasdaq Composite Gains 2% and Dow Jones Industrial Average Rises 300+ Points Amid Tame PPI
Stocks traded solidly higher Tuesday afternoon after a tame Producer Price Index added to hopes that the Federal Reserve could cut interest rates at next month’s policy meeting.
The $Nasdaq Composite Index (.IXIC.US)$ gained 362.86 points (2.2%) to trade at 17,143.47 shortly after 2 p.m. ET, while the $S&P 500 Index (.SPX.US)$ rose 77.66 ticks (1.5%) to 5,422.05. Meanwhile, the $Dow Jones Industrial Average (.DJI.US)$ added 342.61 points (0.9%) to notch the 39,699.62 level.
Stocks rose after the Labor Department reported that the PPI -- which measures wholesale inflation -- gained just 0.1% in July, less than the 0.2% that economists had expected. The government will release the July Consumer Price Index, which measures retail inflation, on Wednesday before the bell.
Moderating inflation could pave the way for the Fed to cut its benchmark Federal Funds Rate at the central bank’s Sept. 17-18 meeting, ending a rate-hike cycle that began in 2022.
Meanwhile, individual stocks making news Tuesday as of shortly after 2 p.m. ET included:
-- $Starbucks (SBUX.US)$, which rose 21.8% on word that it's replacing CEO Laxman Narasimhan with Chipotle CEO Brian Niccol. $Chipotle Mexican Grill (CMG.US)$ fell 7.2% on the news.
-- $Tencent Music (TME.US)$, which dropped 15.2% after reporting declining yearly revenues and a drop in mobile monthly active users.
-- $B. Riley Financial (RILY.US)$, which lost 10.5% after falling more than 50% on Monday following suspension of its dividend and word that regulators have subpoenaed its records.
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Jerry Kronenberg
Director of Financial Content
Former top editor at Seeking Alpha, Fidelity.com, TheStreet.com and UPI.
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