Wall Street stocks rebounded on Thursday, as investors weighed better-than-expected retail sales and wholesale inflation data to determine which way the Federal Reserve will take rate policy.
The S&P 500 (^GSPC) gained 0.7%, while the Dow Jones Industrial Average (^DJI) added 0.9%, or about 300 points. The Nasdaq Composite (^IXIC) added 0.8%, as British chipmaker ARM (ARM) popped more than 12% in after-hours trading on the exchange.
Despite high expectations, markets were largely unmoved on Wednesday due to an increase in August’s consumer inflation report. That won’t be enough to push the Fed to change course, economists said.
Thursday’s retail sales reading came in stronger than in July, highlighting how resilient US consumers are despite rising interest rates. It rose 0.6% on the month, compared with expectations of 0.1%, picking up steam as people spend more on gas.
The producer price index rose 0.7% in August, from 0.4% in the previous month, data released Thursday showed that inflation remained stubbornly high despite the Fed’s efforts to ease pressure. But at the same time, “core” wholesale inflation increased by 2.2%, down from the July publication of 2.4%.
Arm’s debut on the Nasdaq on Thursday comes after the SoftBank-backed chip designer bought the chip designer in a blockbuster IPO at a range-topping $51, valuing it at $54.5 billion. The stock quickly rose to more than $57 a share in the first 15 minutes of trading.
The ongoing rally in oil prices is in focus as it has a significant impact on inflation and stocks. WTI crude (CL=F) and Brent (BZ=F) futures traded at 10-month highs on Thursday.
Elsewhere, the European Central Bank raised interest rates for the 10th time in a row, to 4% – the highest level since the introduction of the euro in 1999. ECB Policy makers have also increased their inflation rate. Long.
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