U.S. stock indices rose across the board as producer prices unexpectedly fell, alleviating concerns over interest rate hikes, while strong earnings from major financial firms boosted investor sentiment.
On July 15, the Dow Jones Industrial Average closed up 150.37 points, or 0.29%, at 52,658.64. The S&P 500 gained 28.81 points, or 0.38%, finishing at 7,572.40, while the tech-heavy Nasdaq Composite rose 162.22 points, or 0.62%, to close at 26,269.23.
The inflation data drove the market's upward movement. The U.S. Producer Price Index (PPI) for June fell by 0.3% from the previous month, surprising analysts who had expected it to remain flat. This marked the largest decline in 14 months. Year-over-year, the increase slowed from 6.0% in May to 5.5% in June. Following the consumer price index (CPI) report released the day before, the easing inflation trend has reduced the likelihood of an immediate interest rate hike by the Federal Reserve.
However, inflation concerns remain due to ongoing tensions in the Middle East. Recent clashes between the U.S. and Iran have led to rising international oil prices, prompting some analysts to caution against assuming inflation has stabilized based solely on the June data. Federal Reserve Chair Kevin Warsh also stated during a congressional hearing that the central bank has not yet achieved its inflation stability goals.
Corporate earnings for the second quarter also supported the market. BlackRock and Morgan Stanley reported results that exceeded market expectations, with BlackRock rising 6.6% and Morgan Stanley up 0.4%. Analysts project that S&P 500 companies will see a 23.7% increase in net income for the second quarter compared to the same period last year.
Large technology stocks performed well, with Apple, Alphabet, and Amazon each rising over 3%, contributing to the overall index gains. PayPal surged 17.2% following reports of a buyout proposal from Stripe and private equity firm Advent International.
In contrast, semiconductor stocks faced declines, with the Philadelphia Semiconductor Index falling 2%. SK Hynix's American Depositary Receipts (ADR), which had surged 8.8% in the domestic market the previous day, dropped 9%.
In the bond market, the easing inflation led to a decline in Treasury yields. The yield on the 10-year Treasury note fell by more than 3 basis points to 4.553%, while the 2-year yield dropped 5 basis points to 4.143%.
International oil prices rose slightly amid ongoing U.S.-Iran tensions. West Texas Intermediate (WTI) crude closed at $79.60 per barrel, up 0.33%, while Brent crude finished at $84.95, a 0.26% increase.
* This article has been translated by AI.
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