Stock Market Today: Wall Street Up After Passing First Test of Week as Wholesale Inflation Slows

NEW YORK (AP) — U.S. stocks rose Tuesday and Wall Street calmed down a bit after the release of the first of several highly anticipated reports on the economy this week. better than expected.

The S&P 500 rose 0.9% in morning trading after the U.S. government said wholesale inflation slowed more than economists expected last month. The Dow Jones Industrial Average was up 155 points, or 0.4%, as of 10 a.m. ET, and the Nasdaq Composite was up 1.4%.

High inflation was plague of buyers and financial markets for years. Finally, it looks like it’s slowing down enough to force the Federal Reserve to ease high interest ratesat which the Fed maintains economy crushing levels to suppress inflation.

Treasury yields fell in the bond market after inflation data as investors remain confident that the Federal Reserve’s next meeting next month will bring the first interest rate cut since the COVID-19 crisis in 2020

The yield on the 10-year Treasury note fell to 3.86% from 3.91% on Monday evening.

But there is still some uncertainty. On Wednesday, the U.S. government will release the latest monthly data on inflation experienced by American consumers, which may be less encouraging. On Thursday, a report will be released showing how much American consumers retail store spending.

A growing concern on Wall Street is that the Fed may have kept interest rates too high for too long and undermined the U.S. economy by making it so expensive to borrow money. The economy is still growing, and many economists do not expect a recession, but sharp slowdown in US employment the last month has undermined his strength.

Depot House on Tuesday reported a bigger profit for the spring quarter than analysts had expected, but the company also said high interest rates and uncertainty about the economy were keeping some customers from spending money on home improvement projects.

The retail giant lowered its full-year forecast for a key sales and profit metric, even though it beat second-quarter expectations. Its shares were flat after earlier swinging between modest gains and losses.

Elsewhere on Wall Street, Starbucks shares rose 21.6% after convinced Brian Niccol to leave his position as CEO of Chipotle Mexican Grill to take over the coffee chain. He will start as president and CEO next month and replace Laxman Narasimhan, who is stepping down immediately.

Meanwhile, Chipotle fell 12.6% after naming its COO, Scott Boatwright, interim CEO. Niccol has been CEO since 2018 and chairman since 2020, and helped his shares are rising more than 240% over the past five years, exceeding the 85% gain of the S&P 500 Index.

On the stock markets abroad, indices were moderately higher in most European and Asian countries. Japan’s Nikkei 225 was an exception, rising 3.4%.

The Japanese market has been extremely volatile recently, with the Nikkei 225 experiencing its worst decline in a year Black Monday Crash of 1987. Since the interest rate hike, it has been fluctuating Bank of Japan forced many hedge funds and other investors to withdraw popular trade all at once, where they borrowed Japanese yen at low rates to invest elsewhere. The forced selling that followed the appreciation of the Japanese yen against the U.S. dollar echoed around the world.

However, a promise last week by a senior Bank of Japan official that it would not raise interest rates again while markets remain “unstable” helped calm the market.

Another concern that has been on Wall Street’s minds over the past month is the fear that investors have overdone their the mania around artificial intelligence technology and caused the share prices of several large technology companies to rise too high.

Nvidiathe company whose chips are driving much of the move toward AI was at the center of the action. After rising more than 170% in the first six and a half months of the year, it fell more than 20% in the next three weeks.

Nvidia shares rose 3.1% on Tuesday to be the biggest driver of the S&P 500. All other stocks in a small group known as “The Magnificent Seven” also rose. They almost single-handedly pushed the S&P 500 to dozens of record highs earlier this year, even as high interest rates weighed on much of the rest of the stock market.

Unlike earlier this year, it wasn’t just the Magnificent Seven that rose on Tuesday. The rally on Wall Street was broad-based, with three of the four stocks in the S&P 500 rising. Smaller stocks in the Russell 2000 index also rose 0.9%.

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Contributing writer to AP Business Writer Yuri Kageyama.