US Stocks Edge Closer to Records as Inflation Eases and Oil Prices Drop
The US stock market is inching closer to an all-time high after the latest sign that inflation is getting less bad. The S&P 500 climbed 0.6% and was on track to top its record set last week, while the Dow Jones Industrial Average rose 22 points or less than 0.1%, and the Nasdaq composite gained 0.7%. A report showed wholesale prices in the US were 4.7% higher last month compared to a year earlier, which is still very high but not as bad as June's 5.5% inflation rate at the wholesale level.
The slight improvement in inflation numbers has led traders to bet on a lower chance of interest rate hikes by the Federal Reserve. The probability of a rate hike at the Fed's next meeting in September decreased from roughly 50% to 37%, according to data from CME Group. If inflation continues to trend downward, the Fed might decide to hold off on hiking interest rates.
The easing oil prices also contributed to the market's optimism. The price for a barrel of Brent crude oil fell 1.4% to $87.71. Stocks in the real-estate industry led the way, with AvalonBay Communities rising 2.3% and Builders FirstSource adding 1.7%. Fossil Group saw a 4.7% increase after reporting better-than-expected quarterly results.