On Wednesday, the Dow surged above the 40,000 level, fueled by data indicating a slowdown in inflation that could prompt the Federal Reserve to begin a rate-cutting cycle next month.
By 4:00 PM ET (8:00 PM GMT), the Dow Jones Industrial Average traded 242 points, or 0.6%, higher, closing at 40,008.12. The S&P 500 rose 0.3% and the Nasdaq was flat.
Consumer Price Index (CPI) data signals cooling inflation
The U.S. inflation rate slowed to 2.9% from 3.0% in June, below economists’ estimates of 3%.
Excluding volatile items like food and fuel, the “core” CPI increased by 3.2% in the twelve months to July, lower than the projected 3.3%.
This report follows a cooler-than-expected July producer price index, further indicating that the Fed’s policies are effective in curbing inflation.
“The Fed has been eagerly awaiting signs of the impact of their rate hikes on demand and inflation, and they have finally begun to see it since May,” noted Jefferies in a Wednesday report.
Intel divests Arm stake; Google faces legal scrutiny; Kellanova in acquisition spree
Intel (NASDAQ:) saw a more than 2% drop after selling its 1.18 million share stake in British chip firm Arm Holdings (NASDAQ:) in the second quarter, as per a regulatory filing on Tuesday.
The chipmaker had previously announced workforce cuts of over 15% and a dividend suspension due to a shift towards AI chips and reduced spending on traditional data center semiconductors.
Kellanova (NYSE:) surged nearly 8% after agreeing to be acquired by chocolate giant Mars for $83.50.
Alphabet Inc Class A (NASDAQ:) declined 2% following a Bloomberg report that the U.S. Department of Justice is considering measures to limit Google’s dominance in online search, potentially leading to a breakup.
In terms of earnings, Cardinal Health Inc (NYSE:) climbed almost 4% after raising its full-year guidance post fiscal Q4 results that surpassed analyst expectations.
(Peter Nurse, Ambar Warrick contributed to this article.)