Stock Market Indexes Rally on Inflation Data, Though the Dow Sat It Out
US stock markets showed mixed results as cooling inflation data boosted tech stocks while the Dow Jones remained flat. A small group of major tech companies drove the majority of the market's gains.
Why it matters
The concentration of market gains in a few tech giants highlights the uneven nature of the current economic recovery and investor reaction to inflation data.
Inflation came in cooler than expected on Wednesday morning, which is exactly the news this market has been awaiting for weeks. Then six stocks drove the entire rally, leaving the rest of the market standing still.
The Nasdaq Composite ( ^IXIC +0.24% ) climbed 1.1% as of 12:05 p.m. ET and the S&P 500 ( ^GSPC -0.25% ) added 0.6%. The Dow Jones Industrial Average ( ^DJI -0.86% ) sat exactly flat. The Dow's 30 components split 15 up and 15 down, continuing the balanced-flatness theme.
Core PCE, the inflation gauge the Fed actually watches, rose just 0.2% in August for an annual rate of 3%. Economists expected 0.3% and 3.3%, respectively. The headline PCE figure came in at 3.4%, below the 3.7% forecast. As a result, Treasury yields dropped, and traders quietly moved their next expected rate hike from October to December.
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