Global stocks rise as US inflation inches up
NEW YORK -Stock markets rose Thursday as highly anticipated official data showed that US consumer inflation inched up in July but held at a moderate level.
Although inflation picked up for the first time in around a year, at an annual rate of 3.2 percent, the moderate figure could support the case that the Federal Reserve can hold rates steady at its next policy meeting.
The inflation number “was adequate, not great,” said Steve Sosnick of Interactive Brokers.
Major US indices eked out modest gains, with the broad-based S&P 500 climbing less than 0.1 percent.
Many on Wall Street feel the market is due for a period of sideways or negative trading after a buoyant first seven months of 2023.
The dollar was mixed against other major currencies, gaining on the pound and yen but falling against the euro.
“The dollar has softened on the view if that if inflation behaved largely as expected last month, it’s likely to maintain a high bar for the Fed to raise rates next month,” said Convera analyst Joe Manimbo.
Earlier, leading stock markets in Asia and Europe mostly advanced.
Oil prices dipped on profit-taking, a day after reaching multi-month highs on worries about Russian supplies following a Ukrainian attack on one of the country’s tankers and in light of moves by Saudi Arabia and other OPEC+ members to limit output.
The dip in crude also coincided with a modest retreat in European natural gas prices a day after worries about a workers’ strike at an Australian gas producer sent prices spiking.
Close eye on China
Luxury and travel firms boosted Eurozone markets after China lifted a Covid-era ban on outbound group tours to dozens of countries, which could see crowds of Chinese tourists return to destinations around the world.
Investors were keeping tabs on China, hoping for measures to support the ailing economy, after news that the country had slipped into deflation for the first time in more than two years and exports plunged at their fastest pace since the early days of the Covid pandemic.
With China being a key driver of global growth, the long-running slowdown is fueling concerns about possible spillover effects.
There was also a little nervousness after President Joe Biden signed an executive order directing the Treasury to restrict certain US investments in China in sensitive high-tech sectors, including semiconductors, quantum computing and artificial intelligence.
Beijing hit out at the move, saying it “severely disrupts the security of global industrial and supply chains”.