NEW YORK (FT) - Wall Street stocks were mixed, U.S. government debt rallied and the dollar sank, after a report showed American inflation remained elevated last month.
The blue-chip S&P 500 closed 0.3 per cent higher in New York, notching a new high and coming within 1 per cent of doubling its value from its March 2020 lows, when pandemic lockdowns threw global financial markets into chaos.
The technology focused Nasdaq Composite, more susceptible to strong inflation pushing up interest rates, fell 0.2 per cent. However, the U.S. Treasury market took its cue from the fact that while inflation pressures remain elevated, they haven’t continued to increase, after a report showed the year-on-year rate of consumer price growth held steady at 5.4 per cent last month, matching the 13-year high reached in June. Wall Street economists had forecast a 5.3 per cent rise.
The yield on the 10-year U.S. Treasury note eased 0.02 percentage points to 1.33 per cent, while the dollar moved 0.2 per cent lower against a basket of six global currencies.
Oil rose 1.2 per cent to $71.50. “It seems the market was braced for another blowout print,” noted analysts at Wells Fargo. “Instead, this print is essentially in line with consensus expectations and the underlying details are relatively sturdy.”
The reading on U.S. price growth comes as investors are racing to bet on how quickly the Federal Reserve will begin reining in its crisis-era stimulus programs. One main concern has been whether hot inflation will prompt central bankers to begin cutting bond purchases sooner than markets are expecting.