The Week on Wall Street
Stocks posted solid gains last week, buoyed by robust economic data and constructive comments from Fed officials.
The Standard & Poor’s 500 Index rose 3.93 percent, while the Nasdaq Composite gained 5.29 percent. The Dow Jones Industrial Average lagged a bit, picking up 2.94 percent. The MSCI EAFE Index, which tracks developed overseas stock markets, powered ahead by 4.31 percent.1,2
Upbeat Economic News
Three critical economic data points gave investors what they were looking for: wholesale inflation, consumer prices, and retail sales.
Both the Producer Price Index and the Consumer Price Index rose less than expected in July, reinforcing a picture of cooling inflation. The July retail sales report on Thursday was stronger than expected, which added more fuel to the week-long rally.3,4,5
Market action slowed down on the week’s final trading day, with positive consumer sentiment gains countered only by a drop in housing starts.
It was the S&P 500’s best weekly gain of the year so far and the best since November of 2023. The gains helped erase losses from earlier in the month, when “carry trades” news from Japan unsettled investors.6,7
Double Assist
Last week’s market rally saw assists from two places: economic data and constructive Fed comments.
On Thursday, Atlanta Fed President Raphael Bostic said he had “a lot more confidence that inflation’s sustainably on its way to 2%,” citing steady drops in CPI. And St. Louis Fed President Alberto Musalem said, “the time may be nearing when an adjustment (to the Fed Funds Rate) may be appropriate.8
Weekly Riddle
It stands higher than any tree, yet it seemingly takes forever to grow, and you can’t see its roots. You won’t have to shimmy up any trunk to reach its top. What is it?
Last week’s riddle: There are three cups of flour on a counter and you take one away. How many cups of flour do you have now?
Answer: You have one cup of flour, as you have taken one away.
John Dombroski Jr. may be reached at (480) 991-1055 or [email protected]
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