During midday trading in New York, U.S. stocks saw a decrease in their earlier gains. This occurred even though investors initially reacted positively to lower-than-expected inflation data, which led the market to anticipate the Federal Reserve leaving interest rates unchanged next month.
In July, the consumer price index (CPI) rose from 3% year on year to 3.2%, marking the first increase in a year. However, this was still below the projected 3.3%. Core inflation, which is closely monitored by the Fed, decreased from 4.8% to 4.7%.
Despite the positive start, the major indices reversed direction around 10 a.m. ET. Nvidia Corp., a semiconductor company, continued to experience losses and is on track for its third consecutive week of declines and its worst week of the year, after a 5% drop this week.
In terms of index performance, the S&P 500 ticked 0.3% higher, while the Dow Jones increased by 150 points or 0.5%. The Nasdaq 100 and Russell 2000 showed gains of 0.5% and a slight decline of 0.1%, respectively.
In midday trading, the SPDR S&P 500 ETF Trust, SPDR Dow Jones Industrial Average ETF, and Invesco QQQ Trust showed gains of 0.5%, 0.5%, and 0.6% respectively.
Out of the eleven S&P 500 sectors, ten showed positive performance. The Industrials Select Sector SPDR Fund was the only sector with a small decline of 0.1%. The Communication Services Select Sector SPDR Fund was the best performer of the day, showing an increase of 0.8%.
Other economic data included an increase in the number of individuals claiming unemployment benefits, exceeding economists’ expectations. Additionally, the Treasury will be auctioning 30-year bonds, and Philadelphia Fed President Patrick Harker will be speaking later in the day.
In stock news, Sonos Inc. climbed over 7% in premarket trading following its quarterly results. Walt Disney Co. added over 4% despite missing revenue forecasts, while Tapestry Inc. fell 15% after announcing an acquisition.
Crude oil fell by 1.1%, with Treasury yields remaining steady. The dollar weakened, and European equity indexes closed higher. Gold and silver prices showed slight increases, while Bitcoin saw a small decline.
