Stock market today: Wall Street holds firm after inflation report helps clear the way for rate cuts
Wall Street is holding relatively steady after the latest update on inflation came in almost exactly as economists expected
NEW YORK — Wall Street is holding relatively steady Wednesday after the latest update on inflation came in almost exactly as economists expected.
The S&P 500 was edging down by 0.2% in morning trading, coming off one of its best days of the year. The Dow Jones Industrial Average was up by 42 points, or 0.1%, as of 10 a.m. Eastern time, and the Nasdaq composite was 0.4% lower.
Treasury yields were easing a bit in the bond market after initially wavering when the U.S. government said consumers paid prices that were 2.9% higher last month for gasoline, food, shelter and other things than a year earlier.
The data should keep the Federal Reserve on track to cut its main interest rate at its next meeting in September, a move that Wall Street has long been looking forward to. The Fed has been keeping rates at an economy-crunching level in hopes of stifling inflation that topped 9% two years ago, and lower rates would ease the pressure on both the economy and on prices for investments.
The only question is how big the first cut to rates since the 2020 COVID crash will be: the traditional quarter of a percentage point or a more dramatic half point?
Wednesday’s reading on inflation at the consumer level wasn’t as cool as the prior day’s update on inflation at the wholesale level, but it likely doesn’t change much, according to Chris Larkin, managing director, trading and investing, at E-Trade from Morgan Stanley.
If most of the data over the next few weeks points to a slowing economy, he said the Fed may cut more aggressively. That includes a report coming up Thursday about how much U.S. shoppers spent at
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