Stock market today: Wall Street gains ground, but still headed for a loss in August
By DAMIAN J. TROISE
AP Business Writer
NEW YORK (AP) — Stocks rose modestly in late morning trading on Wall Street Thursday and are on track to end a mostly miserable August on an up note.
The S&P 500 rose 0.2%. The benchmark index still on track for its first monthly loss since February, but has chipped away at the severity of the decline after four straight gains.
The Dow Jones Industrial Average rose 39 points, or 0.1%, to 35,929 as of 11:22 a.m. Eastern. The Nasdaq rose 0.4%.
Technology and communications stocks led the gains. Software company Salesforce jumped 5.4% after raising its profit forecast for the year. Cloud-based security company CrowdStrike rose 7.9% after reporting strong financial results.
Dollar General was among several retailers slipping after reporting weak earnings and forecasts. It slumped 16% after cutting its profit forecast for the year.
The government reported that a measure of inflation closely tracked by the Federal Reserve remained low in July. The latest update for personal consumption and expenditures, or the PCE report, is the latest sign that price increases are cooling. Investors are hoping the Fed may be close to done raising interest rates.
The central bank has raised its main interest rate aggressively since 2022 to the highest level since 2001. The goal has been to rein inflation back to the Fed’s target of 2%. PCE measured 3.3% in July, matching economists expectations. That’s down from 7% a year ago.
The latest inflation data follows updates on jobs and consumer confidence this week that also supports hopes for the Fed to pause interest rate hikes. The central bank held rates steady at its last meeting and is expected to do the same in September. Investors are expecting rates to hold steady for the remainder of 2023, according to CME’s FedWatch tool.
The Fed has maintained that it is ready to keep raising interest rates if it has to, but will base its next moves on the latest economic data.
“The last hike they made potentially could be the last for the year,” said Chris Zaccarelli, chief investment officer for Independent Advisor Alliance. “As long as inflation remains controlled and contained, I think the Fed is done raising interest rates.”
Bond yields edged lower. The yield on the 10-year Treasury slipped to 4.09% from 4.11% late Wednesday. The yield on the 2-year Treasury, which tracks expectations for the Fed, edged higher to 4.86% from 4.88% late Thursday.
Wall Street has one more big economic update to look forward to this week. On Friday, the government will report employment data for August. The strong job market, along with consumer spending, has so far helped thwart a recession that analysts expected at some point in 2023. But, they also made the Fed’s task of taming inflation more difficult by fueling wage and price increases.
The Fed is hoping that it can accomplish taming interest rates without sending the economy into a recession. The likelihood of a recession, or at least a severe one, has seemingly been fading and in turn fueling confidence in the market in 2023, despite the recent August slump.
“Sooner or later you need to have a pullback,” Zaccarelli said. “The market can’t go up in a straight line all the time.”
Markets in Europe mostly fell. Annual inflation there held steady in August as food prices raced ahead of falling fuel costs, but there was no clarity about whether the European Central Bank will pause its record series of interest rate hikes.
Asian markets were mixed.
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Joe McDonald and Matt Ott contributed to this report.
