Stocks rose for a second day as producer-side inflation data eased market concerns. The war between the U.S. and Iran, which began earlier this year, sparked significant concern that monetary policy would tighten as oil prices spiked. Fuel prices are notorious for falling like a feather; even when oil prices decline, prices at the gas pump can remain elevated for longer. The two inflation readings released this week have partially offset such concerns. The market responded by pushing the expected timing of a potential rate hike to later in the year rather than September, which was still the expectation yesterday.
The Dow Jones Industrial Average rose 150 points to 52,659. The Nasdaq rose 0.62% to 26,269, while the S&P 500 gained 0.38% to 7,572. The market rotated again, however, with AI hardware companies posting losses while technology giants advanced. The popular “Magnificent Seven” stocks from prior years were among the biggest gainers, while semiconductor hardware stocks declined.
Interest rates continued to decline as inflation concerns softened. The U.S. five-year Treasury yield declined by 6 basis points to 4.27%, while the 10-year yield declined by 3 basis points to 4.55%.
Here is a summary of today’s Federal Reserve Beige Book: U.S. economic activity increased somewhat, with practically no change in employment levels over the past few weeks. Prices increased moderately, with reports citing the effects of tariffs, oil prices, and supply-chain disruptions. Regions expressed nuanced inflation outlooks, with some expecting prices to increase at the current pace and others anticipating a slowdown as fuel costs fall.
Retail and home-sales data will be released tomorrow, and Adams Wealth Advisors will return with further updates.