US stock market: S&P 500, Dow end flat, after pop from July inflation data fizzles
Wall Street's main indexes finished flat on Thursday, giving up most early gains on milder-than-feared inflation data as investors worried about the U.S. economy's longer-term prospects and whether stocks had further room to run. Data showed headline and core consumer prices both climbed by 0.2% in July, with the headline number notching annual rise of 3.2% and the core up 4.7%.
In the first hour of trading, the three benchmark indexes advanced more than 1% as traders bet the U.S. Federal Reserve would stop further monetary tightening in 2023 and start cutting interest rates early next year. Stock prices started to sag from late-morning onwards, and bounced between positive and negative territory for much of the afternoon.
«People looked at the headline number first and we had the big upswing, but as the day went on, the rally faded and that was probably the right reaction,» said Gregg Abella, CEO of Investment Partners Asset Management. He noted that while inflation has slowed, a look beyond the headline number revealed that core inflation remained sticky, and as traders parsed the data, the initial positive sentiment became more subdued. San Francisco Fed President Mary Daly voiced that cautious tone, saying that while recent inflation data was moving in the right direction, more progress was needed before she would feel comfortable the central bank had done enough.
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