PARIS (Reuters) – The New York Stock Exchange rose at the open on Wednesday, after the latest inflation figures encouraged investors to bet on a rate cut in September – which could however be weaker than expected.
In early trading, the Dow Jones index gained 9.75 points, or 0.02%, to 39,772.01 points, and the broader Standard & Poor’s 500 gained 0.20% to 5,445.05 points. The Nasdaq Composite gained 0.31%, or 54.40 points, to 17,240.744.
US CPI inflation rose 0.2% month-on-month in July, as expected by consensus.
While the unsurprising figure has investors betting on a Fed rate cut in September, it also pushes back the prospect of a significant 50 basis point cut.
Markets had seen roughly equal odds of a 25 and 50 basis point rate cut in September, following a weak monthly jobs report.
Money markets now estimate a 25 basis point cut as 60% likely.
“The stability of inflation figures prompts market observers to question whether current data warrant an aggressive monetary policy adjustment, in particular a 50 basis point rate cut in September,” sums up Florian Ielpo, head of macro research at Lombard Odier IM.
In terms of values, Kellanova gained 7.4%, with Mars announcing the acquisition of the group for nearly 36 billion dollars.
The U.S. Justice Department is considering several options, including breaking up Google, after a judge ruled the company was illegally monopolizing the online search market, Bloomberg News reported Tuesday. Alphabet fell 0.7%.
(Written by Corentin Chappron, edited by Kate Entringer)
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