US stocks wavered on Thursday after a key report on consumer inflation came in cooler than thought, as consumer prices unexpectedly fell on a month-over-month basis for the first time since 2020.
The S&P 500 (^GSPC) hovered near the flatline, after the broad index crossed 5,600 for the first time on Wednesday. The Dow Jones Industrial Average (^DJI) fell 0.2%, while the tech-heavy Nasdaq Composite (^IXIC) was little changed.
The Consumer Price Index (CPI) declined 0.1% over the previous month and increased just 3.0% over the prior year in June. The annual gain was the slowest rise in consumer prices since early 2021.
Stock gains have picked up pace this week as Fed Chair Jerome Powell has suggested that conditions are almost right for the Federal Reserve to start making interest-rate cuts. Thursday’s inflation look bolstered bets on a cut by September, with around 87% of traders expecting such an outcome, according to the CME FedWatch tool.
In corporates, Costco (COST) shares rose after the retailer said it will hike membership fees for the first time since 2017 — seen by some as reflecting price pressures on consumers.
Meanwhile, the new earnings season stirred into life with reports from Pepsi (PEP) and Delta Air Lines (DAL), setting the stage for big bank earnings to kick off second-quarter results in earnest.
Delta shares sank roughly 10% after the carrier’s earnings missed Wall Street estimates, while PepsiCo stock tipped lower as its revenue disappointed investors.
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