On the 15th, U.S. time, all three major U.S. stock indexes in New York closed higher. Economic indicators showing that inflation is easing calmed investor jitters.
On the New York Stock Exchange (NYSE) that day, the large-cap-focused Standard & Poor's (S&P) 500 index rose 0.38% from the previous transaction day to close at 7,572.42. The tech-heavy Nasdaq composite jumped 0.62% to 26,269.23. The Dow Jones Industrial Average also gained 150.25 points, or 0.29%, to end the session higher.
The U.S. Bureau of Labor Statistics said that day that the producer price index (PPI) for June fell 0.3% from the previous month. Economists expected prices to be flat, but the actual result was a surprise decline. The producer price index refers to the expense corporations incur when making goods. When this expense decreases, the prices final consumers pay are more likely to fall. The core producer price index, which excludes the volatile categories of food and energy, also rose only 0.2%, below the market forecast of 0.3%.
John Williams, president of the Federal Reserve Bank of New York, said that day that "inflation has peaked" and "will gradually decline over the next few months." If prices stabilize, the Federal Reserve, which serves as the Central Bank of the United States, will have no reason to hike the benchmark rate aggressively. Jamie Cox of investment firm Harris Financial Group said, "Inflation topped out last month and is trending down again," adding, "The Federal Reserve has been able to avoid the mistake of raising rates excessively because of an inflation shock."
But some experts cautioned against premature optimism. Melissa Brown, head of investment research at SimCorp, noted that the inflation rate still exceeds the Federal Reserve's 2% target. She said, "The market is overreacting to a single piece of fragmentary news."
Geopolitical risks in the Middle East also remain a source of anxiety. U.S. Central Command carried out additional airstrikes targeting Iran that day and resumed a maritime blockade near the Strait of Hormuz. Iran also said, "The Iranian government is currently not planning any negotiations (with the United States) and is focusing all efforts solely on national defense," signaling preparations for a protracted conflict. Reflecting the jitters, West Texas Intermediate (WTI) rose 1.01%, and Brent, the international benchmark, climbed 1.23%.
David Russell of TradeStation warned, "There is no immediate pressure on the Federal Reserve right now, but in the long run oil prices will drive the market." If the key maritime routes are not normalized early, the price-stabilizing effect from lower energy prices could quickly fade.
By individual names, semiconductor corporations saw sharp moves. Micron Technology plunged 9%. Intel and AMD also fell more than 5% and 3%, respectively. SK hynix ADR dropped 9% as revenue-taking orders piled in. By contrast, ASML, the Dutch semiconductor equipment maker, raised its annual sales outlook for the second time this year, as demand for artificial intelligence chips is surging. Thanks to the news, some semiconductor-related stocks pared losses. China's Alibaba also gained about 5% on a state media report that its Qwen AI model will be integrated into Apple Intelligence.
Earnings reports from major corporations also split the tape. BlackRock, the world's largest asset manager, beat market expectations with its second-quarter results, sending shares up more than 7%. Morgan Stanley also posted record quarterly revenue, lifting its stock by more than 1%. SpaceX, the aerospace corporation, extended its slide, with its initial public offering price falling below $135 for the first time.
Warren Buffett, known as a master of investing, sharply criticized the current stock market. In an interview with CNBC, the business news outlet, he said, "Investors treat stock investing like gambling." It appeared to be a rebuke that with all market participants engrossed in speculative transactions, it is difficult to find corporations with true value.