Wall Street closes higher ahead of CPI report

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NEW YORK, Sept 12 (Reuters) – Wall Street rallied on Monday, extending its winning streak as investors awaited crucial inflation data that could provide clues about the length and severity of the Federal Reserve’s tightening policy.

Energy (.SPNY) and Technology (.SPLRCT) Stocks helped all three major US stock indices hit two-week highs and notch their fourth straight session of gains, with growth (.IGX) was slightly favored over the value (.IVX).

The Labor Department’s consumer price index (CPI), expected before the opening bell on Tuesday, is this week’s main event and will be scrutinized for any signs of the number and size of future interest rate hikes by the Fed.

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“The IPC is expected to see a small decline,” said Robert Pavlik, senior portfolio manager at Dakota Wealth in Fairfield, Connecticut. “The market expects the news to translate into smaller rate hikes after the September FOMC meeting.”

“Because of that, you see a risk mentality today,” Pavlik added.

On Thursday, Fed Chairman Jerome Powell said the central bank remains “strongly committed” to fighting decades-high inflation, and that they “will continue to do so until the job is done.” read more

Economists polled by Reuters expect the monthly CPI to have contracted 0.1% in August from July to 8.1% year-on-year, mainly due to the recent cooling in commodity prices. read more

Financial markets have currently priced in a 92% chance that the Federal Open Markets Committee (FOMC) will implement its third consecutive interest rate hike of 75 basis points at the conclusion of the 2019 monetary policy meeting. next week, according to CME’s FedWatch tool.

“The market is now fully priced at 75 basis points for September,” Pavlik said. “The market expects the next one to be 50 basis points and that we’ll see a slight tapering off of rate hikes after that, and Wall Street can live with that.”

According to preliminary data, the S&P 500 (.SPX) gained 43.80 points, or 1.08%, to close at 4,111.16 points, while the Nasdaq Composite (.IXIC) it gained 155.48 points, or 1.28%, to 12,267.78. The Dow Jones Industrial Average (.DJI) it rose 235.39 points, or 0.73%, to 32,387.10.

economically sensitive transport (.DJT) outperformed the broader market, with market-leading megacaps providing the biggest boost.

A jump on Apple Inc. (AAPL.O) The stock, hit this year, came days after the device maker unveiled updates to its iPhone and Apple Watch. read more

Drug manufacturer Bristol-Myers Squibb (BMY.N) rose after the Food and Drug Administration (FDA) approved its psoriasis drug on Friday night.

Rival Amgen Inc. (AMGN.O)maker of the psoriasis drug Otezla, has withdrawn.

Twitter Inc slipped amid its legal dispute against Tesla Inc (TSLA.O) boss Elon Musk for canceling a deal to acquire the social media platform. read more

Operator of KFC and Pizza Hut Yum Brands Inc. (YUM.N) advanced in the wake of its $2 billion share buyback announcement.

Car sales platform Carvana Co (NAVC.N) jumped higher after Piper Sandler’s stock upgrade to “overweight.”

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Reporting from Stephen Culp in New York; Additional reporting by Sinead Carew; Edited by Matthew Lewis and Cynthia Osterman

Our standards: The Thomson Reuters Trust Principles.

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