The shares rose on Thursday because traders expected the latest reading of the key indicator of consumer inflation, will not prevent the federal reserves from lowering its reference interest rate next week.
The Dow Jones Industrial Average ended in the plus of 617 points, or 1.36%, to 46.108.00, while the S & P 500 ended in the plus of 0.85% to 6,587.47. Nasdaq Composite advanced by 0.72% to 22,043.08. All three main average achieved new daily records of all time during a trading day and closed on record levels.
It was a confusing series of numbers, with the reading of the consumer price index for August, which at the monthly level was warmer than expected, but in line with expectations on an annual basis.
The CPI reading showed an increase of 0.4% for the month, according to the Institute for Statistics, more than 0.3% of how economists interviewed by Dow Jones. However, the index recorded 2.9% on a 12-month level, as expected. In addition, the so-called underlying CPI, which excludes unstable food and energy, increased by 0.3% in August and 3.1% compared to last year. Both values were consistent with Dow Jones’s forecasts.
The report also comes the day after the producer price index showed an unexpected drop of 0.1% compared to the previous month.
Meanwhile, the labor market was given another sign to slowing down, because the weekly independence requirements have recorded a surprising jump on Thursday after the number of employment growth was revised earlier this week, SEEbiz reports. The number of workers who submitted the requirements for unemployment compensation for the week ended 6. September increased by 27,000 compared to the previous period of the seasonally adapted 263,000, the highest level of October 2021. It is more than 235,000 as intended.
Yields on government bonds fell on Thursday after the data published, and the return on the reference 10-year government bonds fell to 4%.
With growing evidence of the slowdown in the growth of the American economy, the market is almost certainly assessed the price of a quarter of percentage points at the end of the FED meeting. September, according to the CME Fedwatch. The prospects that the central bank will reduce interest rates for half percentage points have also increased initially.
“A reduction from a quarter of the point is delay and that figure continues to reduce half points on the table, especially when they look at the unemployment data,” Jay Woods, the main market strategy in Freedom Capital Markets. “The conclusion is to monitor the yield of 10-year state bonds. If we see 3 handles at 10-year-old, then the market could recover here.”
The winnings on Thursday was wider than recent sessions, with banks such as JPMORGAN and consumer names like Walmart in the plus for expecting lower interest rates.
