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Stock Market News and Updates: S&P 500 Edges Higher Amid Rate Cut Speculations

The stock market saw a modest rise on August 14, 2024, as investors weighed the likelihood of a Federal Reserve rate cut following the latest inflation data. The S&P 500, Dow Jones Industrial Average, and Nasdaq Composite all posted gains, with the Dow leading the way. Here are the key takeaways and detailed updates on the market movements and economic indicators.

Key Takeaways

  • S&P 500 and Dow Jones Rise: The S&P 500 climbed 0.4%, while the Dow Jones Industrial Average led with a 0.6% increase.
  • Inflation Data: Consumer-price index showed a 2.9% rise in prices over the past 12 months, below the expected 3%.
  • Federal Reserve Rate Cut: Investors are leaning towards a quarter-point rate cut in September, with a 65% chance according to CME data.
  • Corporate Movements: Mars announced a $36 billion deal to buy Kellanova, boosting Kellanova shares.
  • Global Market Impact: UBS shares rallied, and the yen weakened following news of Japan’s Prime Minister stepping down.

Market Performance

The stock indexes finished higher on August 14, 2024. The Dow Jones Industrial Average led the gains with a 0.6% increase, while the S&P 500 climbed a more modest 0.4%. The Nasdaq Composite also managed to eke out a gain despite a drop in Tesla and Alphabet shares. Yields on the 10-year Treasury edged lower for the fourth straight session, settling at 3.821%.

Inflation Data and Rate Cut Speculations

The consumer-price index showed a 2.9% rise in prices over the past 12 months through July, which was below economists’ expectations of 3%. This data has reassured investors that a rate cut from the Federal Reserve is likely next month, but it may not be a large one. Futures prices implied a 65% chance of a quarter-point cut in September, up from 47% the previous day.

Corporate and Global Market Movements

Mars unveiled a deal to buy Kellanova for nearly $36 billion, including debt, which led to a jump in Kellanova shares. UBS shares also rallied, boosting other European banks, after the Swiss lender reported a profit that was roughly double what analysts had expected. In Japan, the yen weakened to about 147 per dollar following news that Prime Minister Fumio Kishida plans to step down.

Conclusion

The stock market showed resilience with modest gains amid speculations of a Federal Reserve rate cut and positive corporate movements. Investors will continue to keep a close eye on economic indicators and global market developments as they navigate the financial landscape.

Sources

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