Stock market holds gains as inflation cools; Small caps, Nasdaq lead

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The stock market rallied on slowing inflation, led by the Nasdaq composite and the small-cap Russell 2000. The indices remained near session highs in afternoon trading.




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The Dow Jones Industrial Average jumped 400 points in the hours before market after reassuring inflation data this morning raised investor hopes of a soft landing. The blue chips index is up 1.5%.

The Nasdaq added to strong morning gains and is up 2.5% in the afternoon session. The S&P 500 is up 1.9%. The Russell 2000 posted a strong gain of 2.5%. Crude oil rose 1.4% to $91.42 a barrel.

Volume on the Nasdaq was 8.5% lower from the same time yesterday. The NYSE saw its volumes increase by 9.5%. The rise in equities led to declines of nearly 6 to 1 on the NYSE and more than 3 to 1 on the Nasdaq.

Inflation and economic data

July’s consumer price index came in at 8.5% compared to June’s 9.1% rise. The less volatile core inflation figure of 5.9% showed that it rose a fraction of 0.3% from June.

The US Dollar softened and fell more than 1%, pulling the Dollar Index to 105.04. The index hit a high of 108.54 in July after inflation peaked in June and strong employment numbers continued into July.

The Cboe Volatility Index fell below 20 for the first time since April.

Tech stocks jump in broad stock market rally

The broad rally in the technology, consumer discretionary, materials, financials, industrials and communication services sectors saw several blue chip names soar.

Overview of the US stock market today

Index Symbol Price loss of profit % To change
Dow Jones (0DJIA) 33258.64 +484.23 +1.48
S&P500 (0S&P5) 4199.12 +76.65 +1.86
Nasdaq (0NDQC ) 12800.01 +307.03 +2.46
Russell 2000 (IWM) 194.93 +4.76 +2.51
INN 50 (FFTY) 29.46 +0.72 +2.51
Last Updated: 12:00 PM ET on 07/27/2022

Technical Leaders Apple (AAPL), Amazon.co.uk (AMZN) and parent company of Google Alphabet (GOOGL) rose more than 3% in today’s trading as 10-year Treasury yields fell 4 basis points to 2.76%.

You’re here (TSLA) shares rose 2.8% after CEO Elon Musk sold $6.9 billion worth of Tesla stock, according to disclosures. The sale can be to complete its acquisition of Twitter (TWTR). TWTR shares rose 3% today.

Somewhere else, Nicholas (NKLA) has announced that Michael Locscheller, who is responsible for its Tre battery production, will become the new CEO next year when Mark Russell retires. The EV company stuck to its production target of 300 to 500 Tre battery-electric trucks after beating estimates last week.

Shares of Nikola pared gains and encountered resistance at their 200-day moving average on Monday.

In the financial sector, the big banks are rising as the stock market hopes for a lower rate hike by the Fed. Banks are sensitive to rate hikes, and as hopes of a soft landing are renewed, banking stocks are soaring.

Goldman Sachs (GS) jumped more than 10% and exceeds its 200-day line while JP Morgan (JPM) broke above its 50-day line.

$52 billion boost for chipmakers

The federal Chip and Science Bill was finally signed into law. Its $52 billion stimulus package for the semiconductor industry landed as the top chipmaker Micron (MU) notified of cooling demand. Micron’s lower capital expenditure plans drove shares of Applied materials (AMAT) and Research (LRCX) down sharply yesterday.

After today’s inflation report, the Philadelphia Semiconductor Index rose almost 3%, while the SPDR S&P Semiconductor ETF (XSD) is expected to end a four-day streak of defeats with a gain of 4% today.

Earnings news in today’s stock market

energy drink manufacturer Celsius (CELH) exceeded expectations late yesterday. Earnings of 12 cents per share beat FactSet estimates of 8 cents. Revenue of $154 million beat estimates of $148.7 million.

Last week, the stock rallied after PepsiCo (PEP) announced that it would take an 8.5% stake in the company and join in a distribution pact. Celsius shares are well above their 50-day line and trading 8% above yesterday’s close.

Somewhere else, Wendy’s (WEN) missed revenue estimates with $537.8 million for its second quarter, falling short of estimates by $2 million. The stock is down after the company also cut its forecast for new restaurant growth. The stock continues to form a cutting base with a buy point of 21.59 but may test support at its 50-day line.

Earlier, Chipotle Mexican Grill (CMG) beat earnings estimates. The burrito chain reported earnings of $9.30 per share, better than expected $9.10, although revenue was $2.21 billion against estimates of $2.25 billion. The shares traded above their 200-day line and are above a buy point of 1,645.10.

Shares of disney (DIS) are up 3.3% ahead of results expected later today.

Stock Market Breakouts Today

Sun Power (SPWR) exceeds a buy point of 25.34 in a cup basis. The company beat earnings estimates with 3 cents per share on revenue of $414 million, compared to estimates of 2 cents on revenue of $362 million for the second quarter.

Graphic packaging (GPK) pared gains but remained in the buy zone from a buy point of 23.09 in a handle cup basis.

Eastern Bank Actions[ticker symb=EBC] are approaching a buy point of 20.74 in a cup base with handle. The stock is now above its 200-day line.

Molina Health (MOH) is in the buy zone from a buy point of 316.01. The stock formed a double bottom is ranked No. 1 in the managed care industry group.

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