Stocks Trim Gains Following Inflation Data, NVIDIA Faces Worst Week Of 2023: What's Driving Markets Thursday?

Stocks gave up some of their early morning gains by midday trading, despite investors having earlier cheered another lower-than-expected inflation print, as the market significantly priced in the likelihood of the Fed keeping rates unchanged next month.

The consumer price index (CPI) increased from 3% year-on-year in June to 3.2% in July, the first increase in a year but less than the projected 3.3%. Core inflation, which the Fed closely monitors, declined from 4.8% to 4.7%.

The relief rally was short-lived, as the major indices reversed direction beginning at 10 a.m. ET. Semiconductors further softened, with Nvidia Corp. (NASDAQ:NVDA) currently on track for its third straight session of losses and the worst week of the year, after a 5% drop this week.

Chart of the Day: NVIDIA’s Weekly Performance in 2023

Cues From Thursday's Trading:

The S&P 500 Index ticked 0.3% higher, while the Dow Jones added 150 points or 0.5%. The tech-heavy Nasdaq 100 was up by 0.5%, while small caps in the Russell 2000 eased 0.1%.

US Index Performance On Thursday

Thursday’s Trading In Major US Equity ETFs: In midday trading on Thursday, the SPDR S&P 500 ETF Trust (NYSE:SPY) was 0.5% higher to $448, the SPDR Dow Jones Industrial Average ETF (NYSE:DIA) rose 0.5% to $353 and the Invesco QQQ Trust (NASDAQ:QQQ) was 0.6% higher to $370, according to Benzinga Pro data.

Ten out of 11 S&P 500 sectors were positive, excluding the Industrials Select Sector SPDR Fund (NYSE:XLI), down by a timid 0.1%. The Communication Services Select Sector SPDR Fund (NYSE:XLC) was the best performer for the day, up 0.8%, followed by the Consumer Discretionary Select Sector SPDR Fund (NYSE:XLY), up 0.5%.

Latest Economic Data:

The annual increase in the consumer price index (CPI) basket saw a fresh uptick from 3% in June 2023 to 3.2% in July 2023, but below economist expectations of 3.3%. Core inflation, which excludes energy and food, fell from 4.8% to 4.7% year-on-year, as in June, slightly below the expected 4.8%.

The jobless claims report showed an increase in the number of individuals claiming unemployment benefits from 227,000 in the week ended July 29 to 248,000 in the week ended August 5. The print was above economists’ expectations of 230,000.

The Treasury auctioned 30-year bonds on Thursday afternoon.

Philadelphia Fed President Patrick Harker, a Federal Open Market Committee member, will speak at 4:15 p.m. EDT.

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Stocks In Focus:

• Sonos, Inc. (NASDAQ:SONO) climbed over 7% in premarket trading in reaction to its quarterly results.
• Walt Disney Co. (NYSE:DIS) added over 4%, despite missing revenue forecasts last quarter. The entertainment giant announced price hikes for its Disney+ service by 27%.
• Tapestry Inc. (NYSE:TPR) fell 15% after announcing the acquisition of Capri Holdings Limited (NYSE:CPRI), which rose 56%, merging luxury brands like Versace, Michael Kors, Kate Spade, Couch, and Jimmy Choo.
• FleetCor Technologies Inc. (NYSE:FLT) rose 4%, as Raymond James raised its price target on the company to $283.
• Among the stocks reacting to their earnings news are Trade Desk, Inc. (NASDAQ:TTD) (down 4.5%), Wynn Resorts Limited (NASDAQ:WYNN) (up about 3%), Plug Power, Inc. (NASDAQ:PLUG) (down about 13%).
• Companies reporting after the close include News Corp. (NASDAQ:NWSA)

Commodities, Bonds, and Other Global Equity Markets:

Crude oil fell 1.1%, with a barrel of WTI-grade crude trading at $83. The United States Oil Fund ETF (NYSE:USO) was 1% lower to $74.  

Treasury yields were steady, with the 10-year yield flat at 4.03% and the two-year yield slightly down by 2 basis points to 4.78%. The iShares 20+ Year Treasury Bond ETF (NYSE:TLT) was 0.5% lower for the day. 

The dollar fell, with the U.S. dollar index, which is tracked by the Invesco DB USD Index Bullish Fund ETF (NYSE:UUP), down 0.1%. The EUR/USD pair, which is tracked by the Invesco CurrecyShares Euro Currency Trust (NYSE:FXE), was 0.3% higher to 1.1008.

European equity indexes closed in the green. The SPDR DJ Euro STOXX 50 Etf  (NYSE:FEZ) rose 1.4%. 

Gold rose 0.2% to $1,918/oz. The SPDR Gold Trust (NYSE:GLD) was 0.2% higher to $178. Silver rose 0.6% to $22.78, with the iShares Silver Trust (NYSE:SLV) up 0.6% to $22.6. Bitcoin (CRYPTO: BTC) was 0.5% lower to $29,408.

Staff writer Piero Cingari updated this report midday Thursday 

Read Next: Ahead Of Thursday’s Inflation Data, El-Erian Sounds Out 2 Uncertainties That Could Undermine July Data

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