The NASDAQ index reversed early declines to hit a record high on Tuesday, helped by a rise in growth-linked mega-cap stocks and as earnings season kicked off on a positive note, while a solid rise in consumer prices in June weighed on sentiment. A Labor Department report showed U.S consumer prices rose by the most in 13 years last month amid supply constraints and a continued rebound in costs of travel-related services, while the so-called core CPI surged 4.5% on a year-on-year basis, the largest rise since November 1991, after rising 3.8% in May. Inflation and positive economic data have dictated Wall Street’s movement since mid-June as investors fear an overheating economy amid a faster reopening could force the Federal Reserve to pare back its ultra-loose monetary policies sooner than expected. Nine of the 11 major S&P 500 sector indexes were trading lower, with the defensive real estate and utility sectors leading declines.
Dow Jones Industrial Average
The Dow Jones Industrial Average fell 0.31%. The best performers of the session on the Dow Jones Industrial Average were Visa Inc. Class A, which rose 1.90% or 4.53 points to trade at 242.40 at the close. Meanwhile, Microsoft Corporation added 1.35% or 3.75 points to end at 281.07 and Coca-Cola Co was up 1.01% or 0.55 points to 55.03 in late trade. The worst performers of the session were Boeing Co, which fell 4.25% or 10.13 points to trade at 228.16 at the close. Caterpillar Inc. declined 1.55% or 3.38 points to end at 215.20 and Home Depot Inc. was down 1.46% or 4.69 points to 317.05.
NASDAQ 100
The NASDAQ index fell 0.38%. The top performers on the NASDAQ Composite were Allied Healthcare Products Inc. which rose 127.40% to 9.005, Red Cat Holdings Inc. which was up 59.93% to settle at 4.750 and Orbsat Corp which gained 39.43% to close at 9.300. The worst performers were SGOCO Group Ltd which was down 52.25% to 9.550 in late trade, Mediaco Holding Inc. which lost 50.82% to settle at 8.360 and Transcode Therapeutics Inc. which was down 28.99% to 4.58 at the close.
Oil
Oil prices gained almost 2% yesterday after the International Energy Agency said the market should expect tighter supply for now due to disagreements among major producers over how much additional crude to ship worldwide. The market has been generally stronger as demand has rebounded and the Organization of the Petroleum Exporting Countries and their allies have held millions of barrels of supply from the market. OPEC+, as the group is known, was expected to boost supply, but discussions broke off without an agreement. U.S West Texas Intermediate crude rose $1.15, or 1.6%, to settle at $75.25 a barrel. Oil prices will be volatile, the IEA said, until differences are resolved among members of OPEC+. The group has been unwinding record output curbs agreed on last year to cope with the pandemic. But a dispute over policy between Saudi Arabia and the United Arab Emirates put plans to pump more oil on hold. Still, coronavirus infections are surging in some parts of the world.
Precious and Base Metals
Gold prices firmed today after getting a lift from weaker U.S Treasury yields and dollar, though the main focus was on Federal Reserve Chair Jerome Powell’s testimony due later in the day following a robust rise in consumer prices. Spot gold was up 0.4% at $1,814.13 per ounce, while U.S gold futures rose 0.3% to $1,814.5. While gold has made gentle gains on the back of slightly lower U.S. dollar and yields, it has not been enough to decisively shift momentum higher. Gold held up surprisingly well overnight after the CPI data propelled the dollar higher and lifted long-dated bond yields. That should give some comfort to bullish investors that gold may finally be regaining its inflation hedging tailwind. The dollar index ticked 0.2% lower, having seen its best daily percentage gain in nearly a month on Tuesday. Benchmark 10-year yields also pulled back, which translates into a lower opportunity cost of holding non-interest-bearing gold. Data yesterday showed U.S consumer prices in June rose by the most in 13 years. Focus now shifts to Powell’s testimony before the Congress for any views on the rising price pressures and possible tightening of monetary policy. Powell has repeatedly stated that higher inflation will be transitory, noting that he expected supply chains to normalize and adapt. Gold prices slumped 7% last month after the U.S central bank signaled at a sooner-than-expected interest rate increase. Elsewhere, silver gained 0.5% to $26.10 per ounce, palladium rose 0.4% to $2,838.18, and platinum was 0.6% higher at $1,111.23. Copper prices lost ground in low volumes today as investors waited on the sidelines for U.S central bank officials to clarify their stance on rising inflation. Today the main focus of the market is on the Fed. We have low volumes because people are waiting for more guidance regarding rate policy after the U.S CPI numbers came in much higher than expected.
Traditional Agricultures
Corn futures rose in yesterday’s trading session on concerns about tightening grain supplies while soybean futures advanced on strong global vegetable oil markets. Wheat futures turned lower yesterday on profit-taking after rallying on supply concerns a day earlier.
Disclaimer
This information has been prepared for information only and does not constitute an offer or commitment. This information does not constitute investment advice as defined by the rules of the FCA.
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