Market Overview
On Wednesday, U.S. equities showed little movement after a government report indicated that inflation came in slightly above economist forecasts. The S&P 500 dipped 0.1%, hovering near its record high from earlier this month. By noon Eastern time, the Dow Jones Industrial Average had declined 100 points, or 0.2%, while the Nasdaq composite was down 0.3%.[S1]
The inflation measure the Federal Reserve prefers stood at 3.7% last month, the same as in June and slightly above the 3.6% economists expected, according to FactSet. It remains well above the Fed's 2% goal. Consumer spending growth, the main engine of the economy, also slowed.[S3]
Earnings and Bond Market
Abercrombie & Fitch jumped 40.4% after reporting stronger quarterly profit than analysts expected and raising its full-year earnings forecast and share buyback plans. J.M. Smucker rose 4.2% after beating expectations and lifting its profit outlook. Intuit fell 5% despite beating profit estimates, as its forecast for nearly 25% profit growth in the upcoming fiscal year fell short of expectations.[S1]
Following the data release, Treasury yields edged upward, with the 10-year note rising to 4.66% from 4.64% late Tuesday. Yields had surged during the summer amid concerns over elevated inflation and the expanding federal debt. Last week, the Treasury Department unexpectedly announced intervention in the bond market, though analysts suggest its impact may be constrained.[S1]
Oil Prices and Global Markets
Oil prices extended their decline, with Brent crude slipping 0.2% to $87.11 per barrel, down from $94 at the close of last week. Prices have been volatile due to uncertainty regarding when the conflict with Iran will permit tankers to exit the Persian Gulf freely. Brent touched a low of $84.56 before rebounding.[S1]
In overseas markets, European indices were mixed following a stronger session in Asia. South Korea's Kospi advanced 1%, and Japan's Nikkei 225 gained 0.6%. Investors also awaited Nvidia's earnings report after the market close, with high expectations for the chipmaker, which has become the most valuable U.S. company.[S1][S3]
