The S&P 500 Index rose by +1.14%, the Dow Jones by +1.10%, and the Nasdaq 100 by +1.33% on Tuesday, following a CPI report that aligned with market expectations. The July headline CPI increased by +2.7% year-on-year, slightly below expectations, while the core CPI rose by +3.1%, above market projections. The likelihood of a Fed rate cut during the September 16-17 meeting increased to 94% from 88% the day prior.
President Trump announced an extension of the US-China tariff truce by 90 days, while also considering legal action against Fed Chair Powell. Trump stated he would impose a 100% tariff on certain semiconductor imports, with exemptions for companies pledging to manufacture in the US. Additionally, the average US tariff is predicted to rise from 13.3% to 15.2% if further tariffs are enacted.
Major corporate stocks showed positive movement, with United Airlines gaining over +10%, buoyed by lower oil prices. Notably, Hanesbrands surged by +28% amid acquisition talks, while Getty Images fell by -2.3% due to disappointing Q2 earnings. The upcoming economic indicators include initial unemployment claims expected to drop to 225,000 and July retail sales anticipated to rise by +0.5% month-over-month.
