Despite negative data on inflation and the US economy, Wall Street ended with gains and closed its best month since 2020

A screen showing the Federal Reserve interest rate announcement as a trader works on the floor of the New York Stock Exchange (REUTERS/Brendan McDermid)

Stocks reaped more gains on Friday with Wall Street closed Their best month since November 2020Defer a welcome to investors after a punishing year for the market.

The Standard & Poor’s 500 It rose 58.05 points, or 1.43%, to 4,130.48 units, while Nasdaq Composite It increased 225.81 points, or 1.86%, to 12,388.40 points. Industry average Dow Jones It advanced 323.51 points, or 0.99%, to 32853.14 points.

The NasdaqThe tech heavyweight ended July with the biggest gain since April 2020. Stocks gained momentum this month, buoyed by better-than-expected corporate earnings and lower bond yields, which eased after the big rally this year on expectations of higher interest rates. .

Stock gains for the month were supported by better-than-expected corporate earnings reports And bond yields, which have fallen after soaring for most of this year, have fallen on expectations of higher interest rates.

Weak economic data, including Thursday’s report, shows that The US economy shrank in the last quarter and could enter a recessionIt also drove stocks higher by giving some investors confidence in it The Federal Reserve may cut its sharp pace to raise interest rates sooner than expected.

The central bank raised the key short-term interest rate in 0.75 percentage point On Wednesday, rising to the highest level since then 2018. The Federal Reserve is raising interest rates in an attempt to slow the US economy and Suppression of the highest hypertrophy in 40 years.

Workers at the New York Stock Exchange (Reuters / Brendan McDermid)
Workers at the New York Stock Exchange (Reuters / Brendan McDermid)

The measure of inflation that the Federal Reserve closely monitors Jumped 6.8% in June from last year, the largest increase in four decades, leaving Americans without respite from rising prices. On a monthly basis, inflation accelerated to 1% in Junecompared with a 0.6% monthly increase in May, the Commerce Department reported Friday.

The numbers confirmed the continuation of inflationwhich is eroding Americans’ purchasing power, undermining their confidence in the economy and threatening Democrats in Congress ahead of the November midterm elections.

however, Some market watchers cautioned not to place too much importance on the June data.

This inflation gauge is for June and we know a lot has changed since then“Especially gasoline prices, so investors should put this inflation report in historical context,” said Jeffrey Roach, chief economist at LPL Financial. “Looking ahead, inflation rates for July will be somewhat lower than the previous month as food and energy costs are supposed to fall in July“.

However, inflation affected one company in its results on Friday: the consumer goods giant Proctor & Gamble. Detergent manufacturer’s actions Extension They fell 5.3% after the company said consumers were cutting back, but the company’s recent price increases were keeping profits in check.

Results of other companies’ reports They were more encouraging.

Exxon and Chevron posted record quarterly profits last quarter amid rising oil and gas prices. The two companies made $46 billion last quarter, which is four times the money the two companies made in the same period last year. Chevron shares rose 8.5 percent to a six-week high, while Exxon rose 4.4 percent.

Amazon It rose 12.1% after the company reported a quarterly loss, but its revenue rose in the quarter.

manzana It rose 3.4% after its quarterly earnings were better than Wall Street expectations. The iPhone maker saw its April-June profit fall 10% while revenue rose 2% as it grappled with manufacturing problems and inflationary pressures.

In the bond market, returns were mixed. The two-year Treasury yield, which tends to move according to the Fed’s forecast, rose to 2.89% from 2.87% on Thursday. The 10-year yield, which affects mortgage rates, fell to 2.64% from 2.67%.

(With information from The Associated Press and Reuters)

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The inflation index that takes into account the Federal Reserve of the United States recorded its highest rise in four decades

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