US stocks fall as investors brace for July CPI report

A trader looks on while waiting for the initial price of Tencent Music Entertainment company’s IPO on the floor of the New York Stock Exchange (NYSE) in New York

Thomson Reuters

US stocks traded mixed on Wednesday as investors awaited the July CPI report.
Markets are hoping cooler inflation will push the Fed to end its rate hike campaign. 
August has been a tough month so far for stocks, with the summer rally losing steam. 

US stocks fell Wednesday as investors waited for key inflation data to roll out Thursday morning.

Major indexes ended in the red, continuing this week’s sell-off and struggling to recover as August proves tough for investors coming off a hot streak earlier this summer. 

Economists polled by Dow Jones expect inflation to accelerate 3.3% annually in July, while Cleveland Fed economists expect inflation to accelerate 3.4% year-over-year. Both estimates are slightly higher than the inflation figures reported in June, when prices rose 3%. 

Investors are hoping that cooler inflation data could influence the Federal Reserve to end its rate hike campaign, which would likely be a boon for stocks. Central bankers will also be considering August inflation and jobs data when making their policy decisions next month, but markets already have priced in an 87% chance rates will be held steady at the September FOMC meeting, according to the CME FedWatch tool.

In the meantime, investors have their eye on The Walt Disney Company, which is set to report earnings after the closing bell. Shares of the entertainment giant have slid 18% over the past year as it struggles to grow earnings amid an uncertain macro environment.

Here’s where US indexes stood at the 4 p.m. ET close on Wednesday:

S&P 500: 4,467.84, down 0.7% Dow Jones Industrial Average: 35,123.95, down 0.54% (190.54 points)Nasdaq Composite: 13,722.02, down 1.17% 

Here’s what else happened today:

Expect a big rally in the stock market after this week’s inflation report, Fundstrat said.The freight recession is getting worse as the economy detoxes from the pandemic trucking boom.The restart of student loan payments isn’t going to drag down the US economy, Ned Davis Research said.Food inflation has mostly been caused by Russia, according to top economist Paul Krugman.It’s about to get harder for US firms to invest in Chinese markets, thanks to a new executive order from President Biden.Big banks are shedding commercial real estate loans as pressure mounts in the sector.Natural gas prices are soaring as energy workers in Australia look poised to strike.

In commodities, bonds and crypto:

West Texas Intermediate crude oil rose 1.52% to $84.20 per barrel. Brent crude, oil’s international benchmark, was up 1.4% to $87.41.Gold dropped 0.52% to $1,949.80 per ounce.The yield on the 10-year Treasury slipped two basis points to 4.004%.Bitcoin fell 1.6% to $29,402. 

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