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Wall Street closes higher after US inflation falls
🇵🇾 Paraguay /Economy & Trade

Wall Street closes higher after US inflation falls

From ABC Color · () Spanish

Translated from Spanish, summarized and contextualized by DistantNews.

At a glance

News Sources not specified Outcome reported
  • Wall Street closed higher, with the Dow Jones Industrial Average rising slightly after inflation data showed a decrease.
  • The annual inflation rate in the United States fell to 3.5% in June, below analysts' expectations.
  • Falling energy prices contributed to the decline, while underlying inflation also decreased, influencing expectations for Federal Reserve interest rate decisions.

Wall Street concluded Tuesday's trading session in positive territory, with the Dow Jones Industrial Average experiencing a modest gain of 0.02%. This uptick followed the release of key economic data indicating that the annual inflation rate in the United States had fallen to 3.5% in June.

The latest Consumer Price Index (CPI) report revealed a seven-tenths of a percentage point decrease, reaching 3.5%. This figure fell below the 3.7% predicted by analysts, who had anticipated a moderation in inflationary pressures partly driven by rising fuel costs following recent geopolitical events. The decline was primarily attributed to a drop in energy prices.

Core inflation, which excludes volatile food and energy components, also showed improvement, falling three-tenths of a percentage point from May to 2.6%, according to the Bureau of Labor Statistics. This sustained decrease in inflation has significant implications for monetary policy.

it is probable that the inflation figures will keep rates unchanged for now.

— Skyler WeinandCommenting on the impact of inflation data on potential Federal Reserve interest rate hikes.

Following the inflation report, the probability of the Federal Reserve raising interest rates at its upcoming July meeting decreased, with CME Group's FedWatch tool indicating a 17% chance. Skyler Weinand, chief investment officer at Regan Capital, suggested that these inflation figures make it "probable" that rates will remain unchanged for now. However, he cautioned that recent communications from Fed Chair Kevin Warsh have generally maintained a hawkish stance.

In market activity, semiconductor companies saw notable gains, with Micron Technology up 4.92%, VanEck Semiconductor up 2.5%, and STMicroelectronics NV up 2.42%. Major financial institutions also reported positive results, with Goldman Sachs rising 9%, JPMorgan up 2.5%, and Bank of America up 1.88%. In other markets, West Texas Intermediate (WTI) crude oil increased by 1.54% to $79.34 per barrel, following President Donald Trump's decision to reverse a previously announced 20% tax on ships transiting the Strait of Hormuz.

almost all the communications that Fed Chairman (Kevin) Warsh has issued have been hawkish so far.

— Skyler WeinandDescribing the Federal Reserve's recent monetary policy stance.
DistantNews Editorial

Originally published by ABC Color in Spanish. Translated, summarized, and contextualized by our editorial team with added local perspective. Read our editorial standards.

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