Skip to content

US stocks rise as key inflation numbers come in

    U.S. stocks opened higher on Tuesday as Wall Street digested cooler-than-expected inflation data and awaited an update on consumer prices. The S&P 500 (^GSPC) rose about 0.7%, while the tech-heavy Nasdaq Composite (^IXIC) rose about 1%. The Dow Jones Industrial Average (^DJI) rose about 0.4%.

    This is the best three-day period so far for the Nasdaq Composite, Nasdaq 100 (NQ=F) and S&P 500, which have each posted four consecutive gains.

    U.S. producer prices, often a signal of the direction of consumer prices, rose just 0.1% month-on-month in July, lower than economists had forecast. On an annual basis, the Producer Price Index (PPI) rose 2.2%, nearly in line with the Federal Reserve's 2% inflation target.

    The PPI release serves as an appetizer for Wednesday's reading on consumer prices. The July retail sales reading, a key indicator of the health of the U.S. consumer, is expected to follow on Thursday.

    Wall Street is coming off an unusually dull day after more than a week of volatility. The S&P 500 and Nasdaq continued to slowly build toward the highs the indexes saw Monday before a three-day selloff wiped out a significant portion of those year-to-date gains.

    Home Depot (HD) was the top name on Tuesday’s earnings call. Shares of the home improvement retailer fell after it lowered its outlook for comparable same-store sales for the rest of the year.

    In other individual moves, Starbucks (SBUX) shares surged more than 15% after a shock announcement that it would replace its CEO with Chipotle CEO Brian Niccol. Shares of Chipotle (CMG) fell nearly 10%.

    Meanwhile, Nvidia (NVDA) rose more than 3% in early trading, building on Monday's 4% gain, after analysts at Bank of America named it a top “rebound” stock.

    Live4 updates

    • Stocks open higher after cooler inflation numbers

      U.S. stock markets opened higher on Tuesday as Wall Street digested lower-than-expected inflation figures and awaited an update on consumer prices, due on Wednesday.

      Shortly after the opening bell, the S&P 500 (^GSPC) rose about 0.7%, while the tech-heavy Nasdaq Composite (^IXIC) gained about 1%. The Dow Jones Industrial Average (^DJI) rose about 0.4%.

    • Chipotle shares drop 8% after CEO leaves for Starbucks

      Shares of Chipotle (CMG) fell as much as 8% in pre-market trading after the company announced the departure of CEO Brian Niccol, who will take on the same role at Starbucks (SBUX) starting next month.

      Niccol has been CEO of Chipotle since 2018. Scott Boatwright, the COO, will serve as the company's interim CEO.

      Niccol played a key role in Chipotle's recovery in recent years, as the company rebounded from the E. coli crisis that began in 2015 and depressed stock prices for years.

      The year before Niccol joined the company, Chipotle’s annual revenue was about $4.5 billion; by 2023, revenue had more than doubled, totaling $9.9 billion for the year. Over the past five years, the stock has risen more than 240%, compared with an 85% gain for the S&P 500.

    • Home Depot's Ugly Quarter

      There isn't much good to report about Home Depot (HD) this quarter.

      A checklist before the earnings presentation:

      • Sales at comparable stores fell by 3.3%.

      • Comparable store sales fell less than the consensus forecast of 2.1%.

      • Transaction trends deteriorated compared to the first quarter.

      • The full-year sales forecast was lowered halfway through.

      • Full-year earnings per share (EPS) were cut midway through.

    • The morning chart is a compliment from BofA

      Bank of America's August survey of fund managers has been released and it's clear that investors are concerned about the growth outlook.

      The chart below shows a decline in global growth expectations, following a series of negative economic surprises this month (particularly in the US).

      Growth expectations are falling.Growth expectations are falling.

      Growth expectations are falling. (BofA)