US stocks rise as traders wait for inflation data

October 11, 2023

US stocks rose for the fourth day in a row today, as traders waited for the consumer price index report to be released on October 12. The Dow Jones Industrial Average increased by 65.57 points (0.19%), to 33,804.87. The S&P 500 gained 18.71 points (0.43%), closing at 4,376.95. The Nasdaq went up by 96.83 points (0.71%), ending the day at 13,659.68.

Despite today’s uptick, stock prices are lower than they were in July, as fears of interest rate increases have dominated the market narrative since then. Bears expect inflation to rise faster than anticipated, causing the Fed to respond with more rate hikes, while bulls are more optimistic that inflation will stay under control and not require interest rates to rise much further. The Bureau of Labor Statistics is expected to release inflation data for September tomorrow. Economists surveyed by Dow Jones have estimated that the US experienced an inflation rate of 0.3% in the month.

Minutes for the September Federal Open Market Committee meeting were released today, revealing that the majority of members expect that at least one more rate hike will be needed this cycle, although some members disagreed with this majority viewpoint. All members agreed that rates will need to remain high until sufficient evidence proves that inflation is moving back to 2% per year.

The 10-year and two-year US Treasury yields moved in opposite directions over the course of the day. The 10-year fell by 0.1 points, to 4.564%. The two-year rose by 0.002 points, to 4.986%. The yield-curve remains inverted, which some traders view as a sign of an impending recession.

Despite the Fed’s talk of interest rate increases, gold traders remained bullish. Gold gained $13.81, rising to $1,873.56 per Troy Ounce.

Oil declined, with West Texas Intermediate falling $2.62 per barrel, to $83.33 and Brent crude falling $2.03 per barrel, to $85.62. Oil surged over 4% on Monday, when traders began to fear that new Iran sanctions may be imposed due to the Israel-Hamas conflict. However, it began to slip back to lower levels on Tuesday after Iran denied involvement in the conflict, and this decline has continued today.

In the forex market, the US Dollar Index fell 0.1%, to 105.73. The euro rose 0.1275%, to 1.0622. The yen fell 0.2777%, causing the number of yen needed to buy a dollar to rise to 149.1180. Some traders expect the Bank of Japan to intervene if this number rises above 150.

Information for this news item was sourced from CNBC, Marketwatch, Kitco, Business Insider and MSN Money.

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