Dow rises 150 points to reach a new record despite investors' fear. On Wednesday, stocks jumped after the inflation report surged, not as bad as feared.
The Dow Jones Industrial Average climbs 160 points, or 0.5%, to touch a new intraday record. Caterpillar and Home Depot led to the 30-stock Dow stocks. The S&P 500 was flat after attaining an intraday high earlier in the session. The technology-heavy Nasdaq Composite dropped 0.5%.
Consumer Price Index July data revealed prices rose 5.4% since last year, while expectations were 5.3%, economists surveyed by Dow Jones reported. The government notified that CPI grew 0.5% in July on a month-to-month basis.
But investors kept eye on the core rate of inflation, which could show inflation will remain tempered and the economy will stay stable. CPI jumped by 0.3% last month that excluded energy and food prices. Core prices still surged jumped 4.3% on a year-over-year basis.
Used car prices climbed just 0.2% in July after jumping more than 10% in the prior month. However, investors have expected the price as one sign of out-of-control inflation.
“The data should help assuage investor fears that the Fed is too laid-back about inflation pressures,” Seema Shah, chief strategist at Principal Global Investors said. “The details of the data release suggest some easing in the reopening and supply-shortage driven boost to prices, and tentatively suggests that inflation may have peaked. Investors in the transitory camp will feel slightly vindicated.”
West Texas Intermediate crude dropped by more than 1% to about $67.44 per barrel. European benchmark Brent crude also fell by more than 1% to about $69.85 per barrel.
The 10-year Treasury yield traded flat following the CPI report and showed an earlier gain and trading around 1.344%.