US stocks lifted higher on Wednesday as investors assessed easing inflation data, which is likely to keep Federal Reserve officials divided on whether to raise interest rates.
The Dow Jones Industrial Average traded roughly flat, while the S&P 500 edged up 0.3%. The Nasdaq Composite rose 0.7% in what is a relatively quiet week in markets beyond the tail end of earnings season.The Consumer Price Index print showed inflation continued to cool in July to a 3.4% annual rate, matching economists’ expectations and easing from June’s 3.5% increase. On a monthly basis, inflation rose 0.1% from June.
Despite a slight pullback, inflation remains stubbornly above the Fed’s 2% target, complicating central bankers’ next decision to hold or hike rates in September. Following Wednesday’s inflation data, traders tilted their bets toward the Fed holding rates steady after a roughly 50-50 split the day before.
Ongoing tensions in the Middle East serve as the backdrop propping up inflation and Treasury yields as the US and Iran remain deadlocked in negotiations to reopen the Strait of Hormuz. The US enforced its blockade of the strait by firing on a Panama-flagged ship attempting to cross the Gulf of Oman on Tuesday, lifting Brent crude futures close to $90 per barrel.
Yahoo Finance
