Precise Investors Editorial Team
The broad market index finished up 0.3% at 6,532.04, a record close for the index
The U.S.’ S&P 500 hit new highs on Wednesday after a reading on wholesale prices unexpectedly dropped, a welcome development for investors awaiting a U.S. central bank rate cut next week.
The broad market index finished up 0.3% at 6,532.04, a record close for the index. It had risen nearly 0.7% at its peak to 6,555.97, scoring a new all-time intraday high as well. The Nasdaq Composite rose 0.03% to end at 21,886.06, likewise notching a closing high after hitting an all-time intraday high prior to its afternoon retreat. The Dow Jones Industrial Average shed 220.42 points, or 0.48%, to close at 45,490.92, due to a decline in Apple shares as the latest iPhone announcement failed to impress investors.
Sentiment was initially higher after the latest producer price index figure showed that wholesale prices dropped 0.1% in August. Economists polled by Dow Jones had estimated a 0.3% gain. Core PPI, which excludes food and energy prices, likewise dropped 0.1%, while the consensus called for 0.3%.
Economists expect the CPI report to show monthly increases of 0.3%, according to Dow Jones. This includes the headline index as well as the core reading that excludes volatile food and energy prices. If this materializes, the annual headline CPI rate would be pushed up to 2.9%, though the core reading is expected to stay unchanged at 3.1%.
If the numbers come in around these estimates, the U.S. central bank will have room to deliver another rate cut at its September meeting, according to CFRA Research’s Sam Stovall.
Traders currently see a certainty that the bank will cut by at least a quarter point, per the CME Fedwatch tool based on fed futures trading. They also increased their bets following the PPI data that the bank could make an even deeper cut to rates of 50 basis points, or a half percentage point.
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