U.S. stocks rallied on Tuesday, with the S&P 500 and Nasdaq making solid gains as Wall Street welcomed cooler-than-expected inflation data. The S&P 500 climbed over 1.1%, while the Nasdaq Composite surged around 1.8%. The Dow Jones Industrial Average also edged up by 0.7%, reflecting broad market optimism.
This marked the best three-day run for the Nasdaq Composite, Nasdaq 100, and S&P 500 in recent memory, with each index tracking four consecutive wins.
The boost came after July’s Producer Price Index (PPI) revealed a modest 0.1% month-over-month increase, falling short of economists’ forecasts. Year-over-year, the PPI showed a 2.2% rise, hovering near the Federal Reserve’s 2% inflation target.
The PPI data set the stage for Wednesday’s critical Consumer Price Index (CPI) release, with Thursday’s retail sales report expected to offer further insights into the health of U.S. consumer spending.
After a relatively calm trading day on Monday, which followed a week of volatility, the markets are slowly rebounding toward the highs seen before last week’s three-day sell-off.
In business news, Home Depot saw its shares dip after cutting its outlook on same-store sales for the remainder of the year, signaling potential headwinds in the retail sector.
Meanwhile, Starbucks’ stock dropped around 20% following the surprise announcement that CEO Laxman Narasimhan would be replaced by Chipotle’s Brian Niccol. In contrast, Chipotle’s shares took a 10% hit on the news.
On the upside, Nvidia continued its ascent, gaining roughly 5% on Tuesday after a 4% jump on Monday. Analysts at Bank of America highlighted Nvidia as a top “rebound” stock, fueling investor enthusiasm.
The market’s positive response to cooling inflation data and strong performance in the tech sector reflects cautious optimism as Wall Street looks ahead to more economic indicators this week.
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