US stocks today: US stocks subdued as hot inflation lifts rate hike bets ahead of Nvidia results
US stocks traded flat as investors awaited Nvidia's earnings and assessed hotter-than-expected inflation data. July inflation rose 3.7%, lifting bets on a September Fed rate hike. The Dow slipped 0.04%, while the S&P 500 edged up 0.03% and Nasdaq ...
By Reuters | Updated:
Street's main indexes were little changed on Wednesday as investors held back from making big bets ahead of Nvidia's closely watched quarterly results, while a hotter-than-expected inflation reading added to concerns that the Federal Reserve may keep interest rates higher for longer.
The latest inflation data gave markets another reason to stay cautious. U.S. inflation rose 3.7% in the 12 months through July, above the 3.6% increase economists had expected, while a revised estimate showed the economy grew 1.5% in the second quarter, according to a Commerce Department report.
For live updates on US Markets, click here
The data nudged up expectations for a September rate hike, with Fed funds futures showing about a 44% probability of an increase, compared with roughly 36% before the inflation figures were released. That left investors weighing the strength of corporate earnings against a less supportive interest rate backdrop.
"We're clearly still in a period where inflation is sticky and it's temporarily putting upward pressure on interest rates - an important factor in keeping this bull market for stocks going," said Jeff Buchbinder, chief equity strategist at LPL Financial.
On the S&P 500, information technology and industrials were the biggest boosts, rising 0.3% and 1% respectively.
Microsoft and Apple led gains among megacaps, each rising 0.5%.
AI chip giant Nvidia lost 0.4% ahead of its closely watched quarterly report. Anything less than a stellar report could rekindle doubts about the sustainability of the AI boom and set the tone for tech stocks for the rest of the week.
"This market is a tug of war between earnings and interest rates and, up to this point, earnings have been winning that battle. As long as the fundamentals remain strong, (the) market is going to hold up okay," said Buchbinder.
Bumper results could also deepen the divide between software stocks that have taken a beating this year, and semiconductors, which have capitalized heavily on the AI euphoria.
At 09:53 a.m. ET, the Dow Jones Industrial Average fell 21.54 points, or 0.04%, to 53,555.86, the S&P 500 gained 2.24 points, or 0.03%, to 7,679.52 and the Nasdaq Composite lost 13.85 points, or 0.06%, to 26,137.16.
Meanwhile, financials on the blue-chip Dow lost some ground. Declines in Alphabet and some healthcare stocks kept the S&P 500 and Nasdaq rangebound.
Among stocks, Meta agreed to pay a maximum $16.68 billion and make major changes to Facebook and Instagram to resolve claims by U.S. states of harm to children. Its shares, however, reversed premarket gains to trade 0.6% lower after open.
Shares of Intuit dropped 4% after the TurboTax maker forecast annual revenue below Wall Street expectations.
Other software stocks also came under pressure, with ServiceNow and Atlassian falling about 2% each.
J.M. Smucker gained 4% after the Folgers coffee maker forecast a smaller-than-expected decline in annual sales.
Meanwhile, a report said that Tehran and Oman have reached agreements on their share of the Strait of Hormuz and its revenues, citing Iran's Revolutionary Guards spokesperson.
Worries over higher-for-longer oil prices, rising government debt and inflation expectations had pushed Treasury yields to multi-year highs last week, although they retreated after the Treasury Department announced support measures.
Federal Reserve Chair Kevin Warsh's speech at the Jackson Hole symposium on Friday will be closely watched as U.S. equities approach the historically weaker month of September.
The market's limited moves reflected a cautious stance among investors, with inflation remaining above the Federal Reserve's comfort zone while expectations for strong AI-driven earnings stayed elevated. Nvidia's results are expected to be the next key test of whether robust corporate fundamentals can continue to outweigh concerns over interest rates.
Advancing stocks outnumbered decliners 1.17-to-1 on the NYSE and 1.2-to-1 on the Nasdaq.
The S&P 500 recorded seven new 52-week highs and two new lows, while the Nasdaq Composite posted 32 new highs and 32 new lows.
The latest inflation data gave markets another reason to stay cautious. U.S. inflation rose 3.7% in the 12 months through July, above the 3.6% increase economists had expected, while a revised estimate showed the economy grew 1.5% in the second quarter, according to a Commerce Department report.
For live updates on US Markets, click here
The data nudged up expectations for a September rate hike, with Fed funds futures showing about a 44% probability of an increase, compared with roughly 36% before the inflation figures were released. That left investors weighing the strength of corporate earnings against a less supportive interest rate backdrop.
"We're clearly still in a period where inflation is sticky and it's temporarily putting upward pressure on interest rates - an important factor in keeping this bull market for stocks going," said Jeff Buchbinder, chief equity strategist at LPL Financial.
On the S&P 500, information technology and industrials were the biggest boosts, rising 0.3% and 1% respectively.
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Microsoft and Apple led gains among megacaps, each rising 0.5%.
AI chip giant Nvidia lost 0.4% ahead of its closely watched quarterly report. Anything less than a stellar report could rekindle doubts about the sustainability of the AI boom and set the tone for tech stocks for the rest of the week.
"This market is a tug of war between earnings and interest rates and, up to this point, earnings have been winning that battle. As long as the fundamentals remain strong, (the) market is going to hold up okay," said Buchbinder.
Bumper results could also deepen the divide between software stocks that have taken a beating this year, and semiconductors, which have capitalized heavily on the AI euphoria.
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At 09:53 a.m. ET, the Dow Jones Industrial Average fell 21.54 points, or 0.04%, to 53,555.86, the S&P 500 gained 2.24 points, or 0.03%, to 7,679.52 and the Nasdaq Composite lost 13.85 points, or 0.06%, to 26,137.16.
Meanwhile, financials on the blue-chip Dow lost some ground. Declines in Alphabet and some healthcare stocks kept the S&P 500 and Nasdaq rangebound.
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Among stocks, Meta agreed to pay a maximum $16.68 billion and make major changes to Facebook and Instagram to resolve claims by U.S. states of harm to children. Its shares, however, reversed premarket gains to trade 0.6% lower after open.
Shares of Intuit dropped 4% after the TurboTax maker forecast annual revenue below Wall Street expectations.
Other software stocks also came under pressure, with ServiceNow and Atlassian falling about 2% each.
J.M. Smucker gained 4% after the Folgers coffee maker forecast a smaller-than-expected decline in annual sales.
Meanwhile, a report said that Tehran and Oman have reached agreements on their share of the Strait of Hormuz and its revenues, citing Iran's Revolutionary Guards spokesperson.
Worries over higher-for-longer oil prices, rising government debt and inflation expectations had pushed Treasury yields to multi-year highs last week, although they retreated after the Treasury Department announced support measures.
Federal Reserve Chair Kevin Warsh's speech at the Jackson Hole symposium on Friday will be closely watched as U.S. equities approach the historically weaker month of September.
The market's limited moves reflected a cautious stance among investors, with inflation remaining above the Federal Reserve's comfort zone while expectations for strong AI-driven earnings stayed elevated. Nvidia's results are expected to be the next key test of whether robust corporate fundamentals can continue to outweigh concerns over interest rates.
Advancing stocks outnumbered decliners 1.17-to-1 on the NYSE and 1.2-to-1 on the Nasdaq.
The S&P 500 recorded seven new 52-week highs and two new lows, while the Nasdaq Composite posted 32 new highs and 32 new lows.
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