On Wall Street, all three major indices closed higher, led by Nasdaq, which closed up more than 2.4%
Global stocks rose on Tuesday as slowing US producer inflation bolstered hopes of interest rate cuts from the Fed.
On Wall Street, all three major indices closed higher, led by Nasdaq, which closed up more than 2.4%.
The trend in inflation is leading in the right direction, and today was good news, Tom Cahill, of Ventura Wealth Management, told AFP.
That suggests that the Fed will very likely cut the rates, he said.
The week’s main focus is expected to be US consumer inflation figures out on Wednesday, which could influence the Fed’s monetary policy decision-making.
However, investors got reassuring data on Tuesday, with the US Labor Department’s producer price index (PPI) for July increasing by just 0.1%, down marginally from a 0.2% increase in June.
This was slightly cooler than the median forecast of economists surveyed by Dow Jones Newswires and The WSJ.
Core PPI excluding volatile food and energy prices was flat.
On an annual basis, producer price index came in at 2.2%, down sharply from a revised 2.7% rise a month ago.
The key takeaway from the report is the disinflation trend in total and core PPI, as that is moving in a necessary direction to drive a rate cut by the Fed, according to Briefing.com analyst Patrick O’Hare.
The Fed is widely expected to make a first interest rate cut in September, and markets expect it to make at least a second one this year.
Tokyo soared in Asian trading, with traders catching up with Monday’s gains elsewhere after a long holiday weekend in Japan.
London closed the day higher after data showed Britain’s unemployment rate had unexpectedly dropped in the second quarter and wage growth slowed to the lowest level in nearly two years.
Frankfurt also gained despite data showing German investor confidence worsened more than expected in August, as a hoped-for recovery in Europe’s biggest economy remains out of reach.
