US inflation hits Wall Street stocks
A rebound for technology stocks led Wall Street to records on Wednesday, but the majority of US stocks fell following another discouraging update on inflation.
The S&P 500 rose 0.6% and topped its prior all-time high set at the start of the week. The Dow Jones Industrial Average dipped 67 points, or 0.1%, while the Nasdaq composite set its own record after climbing 1.2%.
Gains for tech stocks led the way, like Micron Technology’s 4.8% and On Semiconductor’s 11.1%. They had stumbled the day before after momentum suddenly halted for stocks riding excitement around artificial-intelligence technology.
Nvidia, the chip company that was among the first faces of the AI boom, rose 2.3% and was the strongest force pushing upward on the S&P 500 because of its immense size. Its CEO, Jensen Huang, got an invitation to join President Donald Trump on his trip to China, where they could discuss allowing shipments of Nvidia AI chips to the world’s second-largest economy.
American inflation accelerating
But the majority of stocks outside of the technology industry fell, as pressure builds on Wall Street.
A report on Wednesday showed that inflation at the US wholesale level was considerably worse last month than economists expected. That followed a report on Tuesday showing accelerating inflation at the US consumer level.
Prices for fuel, transportation and many other things are rising because of tariffs, bad weather affecting food prices and other reasons. But atop them all is the jump in oil prices created by the war with Iran, which has slowed the global flow of crude to customers worldwide.
On Wednesday, oil prices moved more modestly following big gains early in the week, and the price for a barrel of Brent crude oil fell 2% to settle at $US105.63.
But it remains well above its price of roughly $US70 from before the war, and the International Energy Agency said on Wednesday that oil inventories worldwide are depleting at a record pace. The resulting jump in oil prices has forced traders to give up most hopes for a cut to interest rates this year by the Federal Reserve. If anything, a hike to rates seems like the next-best bet after no move in rates this year.
Wall Street generally loves lower rates because they would give the economy a boost by making mortgages and other loans cheaper. They can also push upward on prices for stocks and all kinds of other investments, but the downside is they can worsen inflation.
All told, the S&P 500 rose 43.29 points to 7,444.25. The Dow Jones Industrial Average dipped 67.36 to 49,693.20, and the Nasdaq composite climbed 314.14 to 26,402.34.
The Associated Press
