US stocks tick higher as CPI grows in line with expectations

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Note: Figures recorded at 7:45am AEDT. The closing figures and video recording will be available at 9:00am AEDT.

Stocks were higher on Tuesday as Wall Street parsed through another round of inflation data in search for clues on when the Federal Reserve could start easing monetary policy.

The S&P 500 ticked up 0.4%, while the Dow Jones Industrial Average climbed 166 points, or 0.4%. The Nasdaq Composite gained 0.6%.

All three major indexes touched new intraday 52-week highs on Tuesday, with the S&P 500 hitting its highest intraday level since March of 2022. The tech heavy Nasdaq and Dow touched their highest intraday levels since April and January of last year, respectively.

US consumer prices for the month were largely in line with expectations, with a 0.1 percent increase from the prior month and a 3.1 percent rise from the previous year, reaching 4 percent on a core basis after excluding energy and food.

The report suggests ongoing inflation pressures, particularly in supercore inflation, but it's uncertain whether it will significantly impact the Federal Reserve's policy decisions, reinforcing the expectation of elevated interest rates to control inflation.

The report comes as investors try to end a strong year on a high note. The Dow, S&P 500 and Nasdaq Composite are all riding three-day winning streaks and have six consecutive weeks of gains. The S&P 500 also closed at its highest level since March 2022, while the 30-stock Dow settled at its highest point since January 2022. During the six-week run, the S&P 500 has surged more than 12%.

Traders will now turn their attention to the Fed’s policy announcement, slated for Wednesday at 2 p.m. ET. Wall Street largely expect the central bank to hold rates steady. However, they will comb through Chair Jerome Powell’s commentary for signals of when rate cuts could come.

Shares of tech giant Oracle were down more than 12% after the company’s revenue for the fiscal second quarter missed Wall Street expectations. Stock in retailer Macy’s pulled back 7% following a downgrade to sell from Citi on Tuesday. 

Figures around the globe

European markets closed lower. London’s FTSE fell 0.03 per cent, Frankfurt lost 0.02 per cent, and Paris closed 0.11 per cent lower.

Turning to Asian markets, Tokyo’s Nikkei added 0.16 per cent, Hong Kong’s Hang Seng gained 1.07 per cent while China’s Shanghai Composite closed 0.40 per cent higher.

The Australian share market closed 0.50 per cent higher at 7,235.29.

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Sources: Bloomberg, FactSet, IRESS, TradingView, UBS, Bourse Data, Trading Economics, CoinMarketCap.

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