Thu. Jul 25th, 2024


US stocks rose on Friday as the latest reading from a closely watched inflation gauge extended a story of cooling inflation and as investors absorbed the fallout of the Biden-Trump debate.

The S&P 500 (^GSPC) advanced roughly 0.1% after the benchmark closed a step nearer to its record high. The tech-heavy Nasdaq Composite (^IXIC) rose 0.3%, while the Dow Jones Industrial Average (^DJI) lost about 0.1%

The gauges are eyeing an upbeat end to a bumpy week that saw the S&P 500 and the Nasdaq come back from a three-day losing streak. While stocks are set to book a stellar first half as they wrap the last trading day of June, those wobbles have fanned fears of a pullback for the rest of the year.

The last significant data point of the first six months of the year came in the form of the the Fed’s preferred inflation gauge. Yahoo Finance’s Josh Schafer reported inflation eased in May as prices increased at their slowest pace since March 2021.

The core Personal Consumption Expenditures (PCE) index, which strips out the cost of food and energy and is closely watched by the Fed, rose 0.1 % in May from the prior month, in line with Wall Street’s expectations.

Meanwhile, with November’s US election high on the list of risks, investors took note of President Joe Biden’s weak showing in his first debate against presumptive Republican nominee Donald Trump. The former president’s promised tax cuts and trade clampdown are seen as likely to boost stocks. Shares in Trump Media & Technology Group (DJT) jumped in morning trading.

The market is also on alert for more signs that consumer resilience is losing steam, as key companies flag downbeat prospects for sales. Nike (NKE) stock sank more than 15% in early trading, while Walgreens (WBA) shares remained under pressure on the heels of Thursday’s 22% tumble.

Live6 updates

  • New inflation reading offers hope for Fed rate cuts later this year

    The case for the first interest rate cut to arrive in a few months just got stronger.

    A new reading from the Federal Reserve’s preferred inflation gauge showed prices increased at a slower pace in May. That further solidified expectations that central bankers will begin easing rates later this year.

    But despite another positive signal that inflation is easing after running hotter-than-expected in the first quarter, the central bank isn’t likely to cut rates at its next meeting in late July, reports Yahoo Finance’s Jennifer Schonberger.

    The Fed will likely need more time and evidence that inflation is moving sustainably down to its 2% target, making a first cut later in the year more likely.

    “It gives them more confidence that if they needed to they could cut rates, but I don’t think they need to.” said Wilmington Trust bond fund manager Wilmer Stith, noting that economic growth is still strong.

    “It’s too early to cut in the next couple weeks.”

  • Stocks trending in morning trading

    Here are some of the stocks leading Yahoo Finance’s trending tickers page during morning trading on Friday.

    Trump Media & Technology Group (DJT): After former President Donald Trump faced off against current commander in chief Joe Biden in the first presidential debate of 2024, shares of the company rose before shedding roughly 2%. Biden’s performance was largely seen as unsteady, marked by moments of confusion, giving the impression that Trump had won the night. The company is the parent of Trump’s social media platform Truth Social.

    Nike (NKE): The sports apparel retailer sank almost 20% Friday morning after the company projected a larger-than-expected sales decline in 2025, with an expected 10% fall in the first quarter.

    Infinera (INFN): Shares of the telecommunications equipment maker surged 17% after Nokia reached an agreement to buy the company for $2.3 billion. The deal values Infinera at a 28% premium over the stock’s closing price on Wednesday.

    Chewy (CHWY): The online pet food supplier shed close to 10% following a volatile swing triggered by a post on X, formerly Twitter, by the influential trader Keith Gill, who is known as Roaring Kitty. Gill’s account posted a picture of an animated dog on Thursday, without elaboration or context, prompting investors to dive into Chewy. But the sudden climb was matched by a plunge Friday morning, highlighting the sudden and erratic moves of meme stock trading.

  • Stocks rise as the Fed’s preferred inflation metric shows further cooling

    US stocks rose on Friday as the latest reading from the Fed’s preferred inflation gauge showed inflation continues to cool, raising the likelihood of a rate cut in the months to come.

    The S&P 500 (^GSPC) advanced roughly 0.1% after the benchmark closed a step nearer to its record high. The tech-heavy Nasdaq Composite (^IXIC) rose 0.3%, while the Dow Jones Industrial Average (^DJI about 0.1%

  • Fed’s preferred inflation gauge shows prices rose at slowest pace since March 2021

    The latest reading of the Fed’s preferred inflation gauge showed inflation eased in May as prices increased at their slowest pace since March 2021.

    The core Personal Consumption Expenditures (PCE) index, which strips out the cost of food and energy and is closely watched by the Federal Reserve, rose 0.1 % in May from the prior month, in line with Wall Street’s expectations and slower than the 0.3% increase seen in April.

    Core PCE was up 2.6% over the prior year in May, in line with estimates and unchanged from the annual increase seen in the last two months. May’s reading marked the slowest annual gain in more than three years.

  • Trump Media on the move

    After a shaky debate performance by President Joe Biden, shares of Trump Media & Technology (DJT) are on the move.

    As of this writing, shares are up 7.5% in premarket trading.

    Be mindful of what you are trading here, folks.

    Here is the company’s latest 10-Q report, showing a “company” that is doing something and losing a lot of money doing it.

  • Nike shares getting stepped on

    Equally as bad to watch (sort of) as last night’s debate is Nike’s (NKE) stock premarket, down 14% as of this writing.

    The company’s guidance was a real letdown, and concerns linger about its management’s execution around product innovation. To not see better guidance from Nike in an Olympic year is a red flag.

    I liked Stifel analyst Jim Duffy’s take on the quarter:

    “The FY25 guide (the 5th downward consensus revision in 6 quarters), pushes prospects for growth inflection further into 2025 (perhaps FY4Q or spring 2025 at the earliest) asking investors to both underwrite success of not yet proven styles and look across an uncertain consumer discretionary backdrop into 2HCY24 until momentum could build again into 2HCY25. Management credibility is severely challenged and potential for C-level regime change adds further uncertainty. An investor day in Nov. will likely outline a multi-year economic model with lower returns than the precedent adding risk to the premium enjoyed in the historical multiple. We remain appreciative of N scale advantage in a category with secular growth tailwinds and structural margin potential but, at the current valuation, can’t support a compelling upside case until growth inflection becomes more tangible.”

    Duffy downgraded his rating on Nike to Hold this morning.




#Stocks #rise #key #Fedwatched #inflation #data #cooling,
#Stocks #rise #key #Fedwatched #inflation #data #cooling

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