US equities rise as July CPI meets expectations, Fed rate outlook stays mixed
The Dow was flat, the S&P 500 gained 0.3% and the Nasdaq rose 0.7% after July CPI showed a 3.4% annual increase, matching forecasts, leaving Federal Reserve officials divided on future rate moves.
U.S. stock indexes moved higher on Wednesday following the release of July consumer price data. The Dow Jones Industrial Average held near its previous level, the S&P 500 climbed about 0.3%, and the Nasdaq Composite advanced roughly 0.7% in a week that has been relatively quiet after the bulk of earnings reports.
The Consumer Price Index for July indicated a 3.4% year-over-year rise, in line with economists’ projections and down from June’s 3.5% increase. On a month-to-month basis, prices rose 0.1%.
"Inflation remains above the Federal Reserve’s 2% target, making the decision to hold or raise rates in September more complex," a market analyst noted.
The data kept the market’s view of the Federal Reserve split roughly evenly between expectations of a rate hold and a possible hike. Traders adjusted their bets toward a hold after the CPI release, reversing a near-even split the day before.
Geopolitical tensions in the Middle East continued to influence commodity markets, with the United States enforcing a blockade of the Strait of Hormuz after a Panama-flagged vessel attempted to cross the Gulf of Oman. Brent crude futures approached $90 a barrel amid the standoff.