Stocks Edge Higher as Investors Shake Off August Inflation Report

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Stocks Edge Higher as Investors Shake Off August Inflation Report
Credit: © Reuters.

By Liz Moyer

Investing.com -- U.S. stocks edged higher a day after a market rout induced by a hotter-than-expected inflation report for August.

At 12:34 ET (16:34 GMT), the Dow Jones Industrial Average rose 30 points, or 0.1%, while the S&P 500 rose 0.3% and the NASDAQ Composite rose 0.6%.

Tuesday’s sharp drop – tech stocks sold off 5% – was the worst since June 2020. Investors had hoped a cooler inflation report would encourage the Federal Reserve to act less aggressively on interest rates as it tries to tame inflation.

Now, the market is expecting the central bank to raise its benchmark rate by a 0.75 percentage point when it meets next week, and there is increasing sentiment that the Fed may raise rates by a full point.

Fed officials in recent weeks have said they would do whatever it takes to tame still stubborn inflation, even if that means pain to the economy. While gasoline prices have fallen from their peak in June, food prices continue to climb, pinching household budgets.

Another inflation measure, the producer price index , dropped 0.1% in August from the month before, meeting expectations.

Tech stocks sold off sharply on Tuesday and some continued to decline on Wednesday. Meta Platforms Inc (NASDAQ: META ), the Facebook parent, is down 1.4% after falling more than 9% a day earlier.

Starbucks Corporation (NASDAQ: SBUX ) shares rose 5.7% a day after telling investors it expected double-digit revenue growth in coming quarters.

Oil rose. Crude Oil WTI Futures was up 2.8%, to $89.73 a barrel, while Brent Oil Futures crude rose 2.4% to $95.39 a barrel. Gold Futures dipped 0.3% to $1,712 an ounce.

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