US stocks opened higher on Tuesday as Wall Street digested cooler-than-expected inflation data and awaited an update on consumer prices. The S&P 500 (^GSPC) rose about 0.7%, while the tech-heavy Nasdaq Composite (^IXIC) jumped roughly 1%. The Dow Jones Industrial Average (^DJI) inched up around 0.4%.
So far, it’s the best three-day stretch for the Nasdaq Composite, Nasdaq 100 (NQ=F), and S&P 500, with each tracking four straight wins.
US producer prices, often a signal for where consumer prices are heading, rose just 0.1% month-over-month in July, lower than economist forecasts. Year-over-year, the Producer Price Index (PPI) rose 2.2%, nearly in line with the Federal Reserve’s 2% target for inflation.
The PPI release serves as an appetizer for Wednesday’s reading on consumer prices. July’s retail sales reading, a key indicator of the health of the US consumer, is set to follow on Thursday.
Wall Street is coming off an unusually boring day after more than a week of volatility. The S&P 500 and Nasdaq on Monday continued slowly building back toward the highs the indexes saw before a three-day sell-off wiped out a decent chunk of those year-to-date gains.
Home Depot (HD) was the most significant name on the earnings docket Tuesday. The home-improvement retailer’s shares fell after it cut its outlook on comparable same-store sales for the rest of the year.
In other individual movers, Starbucks (SBUX) stock gained over 15% after a shock announcement that it was replacing its CEO with Chipotle chief Brian Niccol. Chipotle (CMG) shares tumbled nearly 10%.
Meanwhile, Nvidia (NVDA) gained over 3% in early trading, building on a 4% gain on Monday as analysts at Bank of America named it a top “rebound” stock.
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Chart of the morning comes compliments of BofA
The Bank of America fund manager survey for August is out, and it’s clear that investors are worried about the outlook for growth.
The below chart shows a plunge in global growth expectations, which follows a steady drumbeat of negative economic surprises this month (mostly in the US).
Growth expectations take a dive. (BofA)
