NEW YORK — The U.S. stock market is ticking toward a record on Thursday following the latest sign that inflation is getting less bad. Stocks also got a lift from easing oil prices in their latest yo-yo move.
The S&P 500 rose 0.4 per cent and was near its record set last week. The Dow Jones Industrial Average was up 133 points, or 0.2 per cent, as of 9:35 a.m. Eastern time, and the Nasdaq composite was 0.4 per cent higher.
Wall Street relaxed a bit after a report showed prices at the U.S. wholesale level were 4.7 per cent higher last month than a year earlier. While that’s still very high, it’s not as bad as June’s 5.5 per cent inflation rate at the wholesale level, and it was slightly better than economists expected.
If inflation continues to trend that way, the Federal Reserve could decide to hold off on hikes to interest rates. Higher rates would help keep a lid on inflation, but they would do so by intentionally slowing the economy and making it more expensive for everyone to borrow money.
Fed officials are split on whether they should have already begun hiking interest rates. But Thursday’s report, following a similar update on inflation at the U.S. consumer level the day before, have traders now betting on just a 32 per cent chance that the Fed will increase rates at its next meeting in September. That’s down from the roughly 50 per cent probability seen two days ago, according to data from CME Group.
That helped push Treasury yields lower, which eases pressure on stocks and other investments. The yield on the 10-year Treasury fell to 4.64 per cent from 4.68 per cent late Wednesday and from 4.72 per cent on Monday, though it’s still well above its 3.97 per cent level from before the war with Iran sent oil and gasoline prices surging.
Oil prices eased back on Thursday, helping to limit worries about inflation. The price for a barrel of Brent crude oil fell 2.5 per cent to US$86.75.
It’s been swinging sharply recently and pinballed between US$72 and US$102 last month as hopes rise and fall that a deal in the war could allow oil tankers to freely exit the Middle East again and deliver crude worldwide.
On Wall Street, stocks of companies with big fuel bills climbed on hopes for less pressure on their costs. United Airlines added 1.4 per cent, and cruise-operator Carnival rose 2 per cent.
They helped offset a drop for Cisco Systems, which fell 9.4 per cent even though the tech giant reported stronger profit and revenue for the latest quarter than Wall Street expected. Analysts said investors may be worried about its profit margins going forward, and its stock has been shaky through the summer amid worries that AI-related stocks in general shot too high.
In stock markets abroad, indexes were mixed in Europe and Asia. South Korea’s Kospi again had one of the world’s biggest moves and jumped 3.6 per cent. Seoul has been home to the world’s sharpest swings for artificial-intelligence stocks because it’s dominated by two tech giants, Samsung Electronics and SK Hynix.
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Stan Choe, The Associated Press
AP Business Writers Yuri Kageyama and Michelle Chapman contributed to this report.