US Stocks-Wall St advances on cool inflation data, strong earnings

The Dow Jones Industrial Average .DJI rose 177.65 points, or 0.34%, to 52,685.92, the S&P 500 .SPX gained 26.97 points, or 0.36%, to 7,570.72 and the Nasdaq Composite .IXIC gained 157.62 points, or 0.60%, to 26,264.63. Among the 11 major sectors in the S&P 500, communication services .SPLRCL advanced the most, while energy stocks .SPNY suffered the largest percentage drop. Advancing issues outnumbered decliners by a 1.48-to-1 ratio on the NYSE. There were 203 new highs and 110 new lows on the NYSE. On the Nasdaq, 2,619 stocks rose and 2,022 fell as advancing issues outnumbered decliners by a 1.3-to-1 ratio. PPI final demand breakdown The Labor Department's Producer Price Index (PPI) report provided a second straight day of cooler-than-expected inflation data, even as newly confirmed U.S. Federal Reserve Chair Kevin Warsh appeared before the Senate Banking Committee in his second day of Congressional testimony. Combined with Tuesday's CPI report, the PPI data suggests that while inflation remains elevated due to U.S.-Iran war price pressures, it took a step in the right direction last month, easing near-term pressure on the central bank to raise its key interest rate. "My fear going into this week was we could get a hot CPI print, inflation above 3.8%, and we didn't get it; we got a cooler reading of 3.5%," Cassidy said. "So that allows the Federal Reserve to have the opportunity to keep rates flat or cut them later this year, which is good news for the market." Financial markets are currently pricing in a 10.2% likelihood that the Fed will implement a 25-basis-point rate hike at the conclusion of this month's monetary policy meeting, down from 31.0% a week ago, according to CME's FedWatch tool. Even so, this week's inflation data is focused on last month, as investors were growing optimistic that negotiators were moving toward a peaceful resolution to the Middle East conflict. That optimism has faded in recent days as the U.S. and Iran staged escalating airstrikes, vying for control over the Strait of Hormuz. That could result in renewed price pressures. Fed Governor Lisa Cook said she is "prepared to act" if inflation does not soon begin to slow. Wall Street stocks gained ground as softening inflation data and a robust beginning of second-quarter earnings season put investors in a buying mood. All three major stock indexes posted modest gains despite weakness in semiconductors, with consumer-focused retail .SPXRT and travel/leisure .SPCOMHOTL clear outperformers. PayPal PYPL.O surged 16.0% after sources told Reuters that Stripe and private equity firm Advent International have jointly offered to acquire it for $60.50 per share — representing around a 28% premium to its Tuesday close. A second day of robust bank earnings added momentum to an auspicious beginning to second-quarter reporting season. BlackRock BLK.N shares advanced 6.3%, after the asset manager beat profit expectations. Morgan Stanley MS.N also beat profit expectations for second-quarter profit. Its shares inched up 0.5%. "This was the best bank setup in my 23-year career, and the results did not disappoint," said Lauren Cassidy, chief investment officer of Founders 100 ETF, in Dallas. "Morgan Stanley, Goldman Sachs, and JPMorgan all had record sales in all-time high earnings, so capital markets are absolutely firing on all cylinders." "I think we're going to see continued strength into 2027," Cassidy added. Analysts currently expect second-quarter year-on-year S&P 500 earnings growth of 23.7%, according to the most recent data from LSEG.

US Stocks-Wall St advances on cool inflation data, strong earnings

Indexes and market breadth

Cooling inflation and Fed testimony

Wall Street advances on soft inflation and strong earnings

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