Wall Street witnessed a remarkable surge in stocks on Thursday, fueled by a combination of robust retail sales and wholesale price inflation data, all while investors eagerly awaited signals on the Federal Reserve’s future rate policy direction. The S&P 500 soared by 0.8%, while the Dow Jones Industrial Average climbed 0.9%, equivalent to approximately 300 points. The Nasdaq Composite joined the rally, adding around 0.8%, with British chipmaker Arm stealing the spotlight by surging more than 25% during its highly anticipated public debut.
Despite heightened expectations, Wednesday’s release of the August consumer inflation report barely moved the markets. According to economists, this modest uptick was insufficient to prompt any significant course correction by the Federal Reserve. Thursday’s retail sales report for the same month, however, told a different story. The data revealed that the resilient US consumer base had shrugged off rising interest rates, as sales experienced a month-on-month growth of 0.6%, significantly surpassing the anticipated 0.1%. This boost was attributed in part to increased spending on gas, highlighting the consumer’s ongoing strength.
Furthermore, Thursday’s Producer Price Index data indicated that inflation pressures remained persistent, despite the Federal Reserve’s efforts to stabilize the situation. Wholesale prices increased by 0.7% in August, a notable rise from the previous month’s 0.4%. Nevertheless, there was a slight relief as the core wholesale inflation rate showed signs of moderation, coming in at 2.2% compared to July’s 2.4%. This may provide some reassurance to those concerned about runaway inflation.
Arm’s highly anticipated debut on the Nasdaq made headlines as it exceeded expectations. The SoftBank-backed chip designer had priced its initial public offering (IPO) at the top end of the range, setting it at $51 per share, with a valuation of $54.5 billion. The stock soared above $57 per share within the first 15 minutes of trading, ultimately closing the day at an impressive $63.59.
Additionally, the ongoing rally in oil prices remained a key focus for investors, given its significant impact on both inflation and stock market performance. West Texas Intermediate (WTI) crude and Brent futures were trading near 10-month highs on Thursday, further adding to market dynamics.
Across the Atlantic, the European Central Bank (ECB) made a noteworthy move by hiking its interest rates for the 10th consecutive time, now standing at 4%. This rate level marks the highest point since the euro’s inception in 1999. ECB policymakers also revised their inflation forecasts upward, indicating their concerns about inflation persisting at elevated levels.
In summary, Wall Street continued to witness a surge in stocks on Thursday, with investors closely scrutinizing retail sales and wholesale price inflation datain anticipation of the Federal Reserve’s forthcoming policy decision. Arm’s impressive public debut added excitement to the market, while inflation data highlighted the enduring nature of inflationary pressures. Oil prices and the ECB’s interest rate hike also contributed to the day’s market dynamics, leaving investors with much to consider in the coming days.
Source: Yahoo Finance
