Nasdaq, S&P500 soars to April 2022 high following inflation drop

The broad U.S market indexes have continued its winning week with Nasdaq and S&P 500 close at the highest level since April 2022 following the release of CPI data hinted that the inflation continue to ease and raised investors hope that the Federal Reserve can bring down inflation without pushing the U.S. economy into a recession.

According to the U.S Bureau of Labor Statistics, the consumer price index have increased by 3% in June, lesser than market expectation of a 3.1% increase. On month over month, the index rose 0.2% for last month which is also lesser than forecast of 0.3%. Additionally, the core CPI which excludes food and energy cost also increased less than expected with the reading of 4.8% against 5% expectation. Following the release, indexes rose across the board, with the Nasdaq jump 1.3% and the S&P 500 up 0.8%.

Many still believe that the Fed will start raising rates later this month, but if upcomic economic data point to a further slowdown in inflation, rate increases beyond July may be further questioned. Chief investment officer at Verdence Capital Advisor stated that: “It’s a nice report in my opinion. The direction that the Federal Reserve heading with the inflation is being achieved. But I don’t believe we’re ready to predict that they’re going to be able to decrease rates.”

Meanwhile, investors will be looking for more clues from producer price data for June that is due on Thursday before the bell which the data is another well-watched gauge of inflation.

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Please note that this articles does not offer any instructions or suggestions regarding investment decisions. Therefore, it is essential that you carefully evaluate your financial situation and conduct thorough analysis, or seek advice from a qualified professional, before making any investment decisions.