Inflation news sent the stock market higher on Wednesday as the Dow Jones Industrial Average climbed in morning action to keep the party going. The Labor Department’s October Producer Price Index fell 0.5% on the month, sharply below estimates for a 0.1% rise, with an annual increase of 1.3%, also below expectations. Core producer prices, excluding food and energy, were unchanged on the month with an annual rise of 2.4%, which was also below forecasts. The Commerce Department released U.S. retail sales figures, showing a 0.1% drop in October, slightly better than the expected 0.3% drop.
Industry giant Target surged 17% in morning trade after reporting better-than-expected earnings and sales results for the third quarter. Other earnings movers for the session included Advanced Auto Parts, which tumbled nearly 8%, and JD.com, which jumped 7% in morning action.
After Wednesday’s opening bell, the Dow Jones Industrial Average climbed 0.2%, while the S&P 500 moved up 0.25% and the tech-heavy Nasdaq composite gained 0.2% in morning action. The yield on the 10-year U.S. Treasury bond ticked higher to 4.5% after the PPI inflation report. Oil prices continued to consolidate, with West Texas Intermediate futures trading just above $78 a barrel.
Tuesday saw significant gains in the stock market rally as the Dow Jones Industrial Average rallied 1.4%, the S&P 500 moved up 1.9%, and the Nasdaq advanced 2.4%. Traders now believe there’s a better-than-60% chance that the Federal Reserve could start cutting rates as early as May.
In terms of stocks to watch, Amazon, MercadoLibre, ServiceNow, and Toll Brothers are among the best performers in the current market rally. Chip giant Intel is also in a buy range, and retail giant Walmart is in buy range, according to IBD MarketSmith chart analysis.
Among the so-called “Magnificent Seven” stocks, Tesla traded up 1.3% early Wednesday, while Nvidia lost 1.4%. Meanwhile, Dow Jones tech icons Apple and Microsoft traded higher after today’s stock market open. Graphics-chip giant Nvidia is in buy range past a double-bottom base’s 476.09 entry after solid gains in recent sessions.
Overall, the day’s market gains were attributed to cooler-than-expected inflation data and strong earnings results from industry giants. As the market rally continues, many eyes will be on these key stocks and their performance in the coming days.