Stocks surged as investors were encouraged by cooler producer inflation. The Dow rose 400 points and the Nasdaq surged 2.4% ahead of CPI data.
US stocks jumped on Tuesday as investor confidence was boosted by evidence of softer inflation.
The Bureau of Labor Statistics reported that the producer price index rose 0.1% in July, underwhelming estimates of a 0.2% increase. Compared to a year ago, prices were up 2.3%, a cooldown from June.
That brought renewed momentum to equity indexes, with the S&P 500 and Nasdaq rising 1.7% and 2.4%, respectively. The Dow climbed close to 400 points.
Investors will now watch for further disinflationary signals in Wednesday’s consumer price index report. According to data from the CME Fedwatch Tool, a majority of traders now expect the Federal Reserve to pursue a 50 basis point interest rate cut next month.
