Aug. 11 (UPI) — U.S. markets hit record highs on Wednesday as investors reacted to a July consumer report that showed prices moderating.
The Dow Jones Industrial Average rose 220.3 points, or 0.62%, while the S&P 500 closed the session up 0.25%, with both major indexes reaching new all-time highs. The Nasdaq Composite fell 0.16%.
Markets moved toward records after a report showing the Consumer Price Index, which measures price increases in all core items for urban U.S. consumers, climbed by 0.5% over June and was 5.4% higher compared to July 2020 but the core inflation measure, which is the index minus food and energy, increased by 0.3% in July — slightly less than analysts expected.
Investors took the core rate of inflation numbers to mean inflation will remain moderate and the economy will sustain its strength.
“It’s encouraging to see the pace moderating a bit month over month supporting the notion that recent price increases are transitory and reopening related,” Mike Loewengart, managing director of investment strategy at E*TRADE Financial, told CNBC. “So while inflation continues to run hot, it’s likely that investors are already pricing it in.”
Caterpillar stock rose 3.59% and Home Depot gained 1.67% to help lead the Dow on Wednesday.
Oil futures dropped early Wednesday after national security adviser Jake Sullivan called on the Organization of the Petroleum Exporting Countries to increase output, with crude futures falling 1%.
Prices bounced back later in the day with West Texas Intermediate crude rising 1.52%, while Chevron climbed 0.75% and Exxon Mobil increased 0.29%.
Both the Dow and S&P 500 hit intraday records on Tuesday as Joe Duran, head of Goldman Sachs Personal Finance Management,” told CNN stocks were 100% up from the low at the start of the pandemic as he predicted a 10% correction in the market.
“The economy is still recovering. We’re still very bullish but there will be corrections going forward,” Duran said.
