U.S. stock indexes opened higher on Wednesday as the June producer price index (PPI) report showed a moderation that exceeded analysts’ expectations. This string of weak readings suggests that inflation is calming in the U.S., which further strengthens the likelihood that the Federal Reserve’s campaign of interest-rate hikes is nearing its end.
Positive Moves in the Market
The Dow Jones Industrial Average (DJIA) rose by 121 points, or 0.4%, reaching 34,466, while the S&P 500 (SPX) gained 0.5% and the Nasdaq Composite (COMP) advanced by 0.8%.
June PPI Results
According to the Bureau of Labor Statistics report, the PPI rose by 0.1% in June, falling short of economists’ expectations of a 0.2% increase. The core PPI, which excludes volatile food and energy prices, also climbed by 0.1%, aligning with expectations.
Positive Job Market Outlook
In addition to favorable PPI results, the number of Americans who applied for unemployment benefits last week decreased by 12,000 to 237,000. This indicates that the U.S. labor market remains tight despite a slowdown in job growth.
As inflation eases and labor market conditions remain robust, investors are optimistic about the future direction of the stock market.