The New York Stock Exchange started off higher as the July Consumer Price Index (CPI) met market expectations, increasing the outlook that the Federal Reserve (Fed) will cut interest rates next month.
According to the New York Stock Exchange on the 12th (local time), the Dow Jones Industrial Average rose 75.4 points (0.17%) to 40,050.53. The Standard & Poor's (S&P) 500 index was up 21.7 points (0.34%) at 6,395.17, while the Nasdaq Composite index traded at 21,507.44, up 122.0 points (0.57%).
The upward trend was largely influenced by the fact that the July CPI, which was announced before the market opened, met market expectations while slowing compared to the previous month. According to the U.S. Labor Department, the July CPI rose 2.7% compared to the same month last year. This is the same level as June (2.7%) and a 0.2% increase compared to the previous month. The core CPI, which excludes the volatile food and energy prices, rose 3.1% year-on-year and 0.3% month-on-month, respectively. The year-on-year increase in the core index rose compared to June (2.9%), marking the highest level in five months since February.
Additionally, the rising expectations that the Fed will lower the benchmark interest rate in September also had an impact. According to the Chicago Mercantile Exchange (CME) FedWatch, the interest rate futures market reflected a 94% probability that the Fed will reduce the benchmark interest rate by 0.25 percentage points (p) at its September monetary policy meeting, an increase of 8 percentage points from the previous day.