Late trading: Inflation data and rebound in chip stocks push S&P 500 higher
In the early morning of July 15th, Beijing time, U.S. stocks were mixed in late trading on Tuesday. Shares plummeted after issuing a profit warning. Traders are weighing a slew of corporate earnings reports and rising oil prices. U.S. CPI growth in June was 3.5% year-on-year, lower than expected. The Dow Jones Industrial Average fell 24.56 points, or 0.05%, to 52474.08 points; the Nasdaq rose 259.53 points, or 1.00%, to 26132.70 points; the S&P 500 Index rose 31.46 points, or 0.42%, to 7546.80 points. International Business Machines Corp. (IBM) shares tumbled after the company warned that second-quarter profits would be lower than expected due to weak demand in its software and infrastructure businesses. Semiconductor stocks rebounded after selling off in the previous session. The VanEck Semiconductor ETF (SMH) rose 2%. The company's gains exceeded 4%. Ram Research Corporation and Technology companies rose more than 5%. STMicroelectronics rose more than 3%. The consumer price index (CPI) fell 0.4% month-on-month in June, bringing the annual inflation rate to 3.5%. Economists polled had expected a 0.2% drop last month and expected inflation to be 3.8%. Market expectations for the Federal Reserve to raise interest rates this year were reduced following the data as inflation slowed. According to CME Group's FedWatch tool, the market believes that the probability of the Fed raising interest rates at its July meeting has dropped to 17% from 42% previously. However, traders still expect a rate hike at the September meeting, with a 63% chance that the target rate will be raised by 25 or 50 basis points. "Tuesday's weaker-than-expected CPI data suggested that the surge in inflation triggered by the Iran war is fading, but that may only be a temporary relief as tensions have escalated in recent days," said Regan Capital chief investment officer Le Venand said. He believes: "Weak inflation data may make the Fed temporarily on hold and reduce the possibility of raising interest rates, but we remind investors that almost all messages sent by Chairman Warsh during his short tenure have been hawkish." "Wash wants to get consumer prices under control, and the Fed's best tool right now is to raise interest rates," he added. Federal Reserve Chairman Kevin Warsh testified before Congress on Tuesday that "the inflation surge of the past five years will be a thing of the past." Oil prices retreated from their highs after U.S. President Donald Trump dropped his demand that ships pay 20% to transit the crucial Strait of Hormuz. U.S. crude oil futures once exceeded US$80 per barrel, and recently rose 1% to above US$78 per barrel; international benchmark Brent crude oil futures rose 1% to above US$84 per barrel. Trump said on Monday he would reimpose a blockade on Iranian shipping through the strait. Banking stocks led the gains, with shares soaring 7% after the bank reported earnings that beat expectations. large bank Second-quarter results were also released, with both rising about 1%.