London (AFP) – US equities mostly gained Wednesday as July’s inflation data came in as expected, taking pressure off the Federal Reserve to increase interest rates and giving a boost to some technology shares. US consumer inflation slowed slightly to 3.4 percent in July from 3.5 percent the previous month, in line with analyst forecasts.
“The July CPI report, at the least, did not stoke new concerns that the Fed will have to raise rates at the September FOMC meeting. That is the key takeaway,” said Patrick J. O’Hare, an analyst at Briefing.com. New York’s tech-heavy Nasdaq and the wider S&P were all higher in late-morning trading, boosted by some technology companies whose massive investment spending on AI would have been penalised by higher interest rates. The narrower Dow was little changed.
Paris, London, and Frankfurt closed marginally lower, pulled down by energy shares. Trading in London “was defined by caution rather than conviction. Investors remained focused on the ongoing Middle East conflict and the unresolved question of whether the Strait of Hormuz will reopen,” said Patrick Munnelly, a strategist at Tickmill Group.
Wednesday’s US inflation number follows a report last week showing the world’s top economy lost more than 20,000 jobs in July, indicating a slowing economy. But at the central bank’s last decision-making meeting in July, three board members called for a rate increase, dissenting from the final decision to hold rates steady, as US inflation has held stubbornly above the Fed’s two-percent target for more than five years.
“Although inflation remains elevated, today’s report should give investors greater confidence that peak inflation appears to be behind us,” said etoro US investment analyst Bret Kenwell. “With the odds of a September rate hike sitting near 50-50, disappointing jobs and GDP data have investors debating how much urgency the Fed actually faces to raise rates,” he said. There will be one more CPI release and another jobs report before the Fed’s next meeting in September.
CoreWeave rose 18 percent in New York after the AI cloud company reported soaring revenue. Nvidia was up 3 percent in its wake, and other tech companies such as Nebius, Micron, and SpaceX also showed strong gains. Oil prices stabilised Wednesday after big swings in recent weeks as US-Iran war tensions ebbed and flowed. Pakistan’s interior minister was visiting Iran to discuss regional security, stability, and other developments, as Islamabad tries to mediate a resolution to the conflict.
It comes as the International Energy Agency sharply reduced its forecast for global oil demand this year, as supplies remain crimped by the closure of the Strait of Hormuz and high prices deter buyers. Demand is expected to slump by 1.6 million barrels per day compared with its forecast slump of one million in its July report. The dollar was little changed against its peers.
– Key figures around 1540 GMT –
New York – DOW: DOWN less than 0.1 percent at 53,778.08 points
New York – S&P 500: UP 0.2 percent at 7,743.90
New York – Nasdaq Composite: UP 0.4 percent at 26,564.79
London – FTSE 100: DOWN 0.1 percent at 10,833.15 (close)
Paris – CAC 40: DOWN 0.5 percent at 8,674.94 (close)
Frankfurt – DAX: DOWN 0.2 percent at 26,331.07 (close)
Tokyo – Nikkei 225: UP 0.8 percent at 67,524.06 (close)
Hong Kong – Hang Seng Index: DOWN 0.8 percent at 25,440.17 (close)
Shanghai – Composite: UP 0.3 percent at 3,946.68 (close)
Brent North Sea Crude: UP 0.1 percent at $89.00 per barrel
West Texas Intermediate: UP less than 0.1 percent at $83.22 per barrel
Euro/dollar: FLAT at $1.1542 on Tuesday
Pound/dollar: DOWN at $1.3505 from $1.3506
Dollar/yen: DOWN at 159.23 yen from 159.27 yen
Euro/pound: DOWN at 85.45 pence from 85.46 pence
© 2024 AFP
