"Stocks got some help from a report showing that inflation in the United States accelerated to 2.7% last month from 2.6% in July, according to the measure of prices that the Federal Reserve likes to use. While that's above the Fed's 2% target, and it's more painful than any household would like, it was precisely what economists had forecast. That offered some hope that the Fed could continue cutting interest rates in order to give the economy a boost."
"That's critical for Wall Street because it's already sent U.S. stocks on a blistering run to records from a low in April in large part because of expectations for a string of rate cuts. Without such cuts, growing criticism that stock prices have become too expensive by rising too quickly would become even more powerful. The Fed just delivered its first rate cut of the year last week but is not promising more because they could worsen inflation."
The S&P 500 rose 0.6%, ending a three-day losing streak, while the Dow gained 299 points (0.7%) and the Nasdaq added 0.4%, moving closer to all-time highs. U.S. inflation accelerated to 2.7% in August from 2.6% in July on the Fed's preferred measure, matching economists' forecasts. The data increased hopes the Federal Reserve could continue cutting interest rates to support the economy, following its first cut last week. New tariffs announced by President Trump target pharmaceuticals, kitchen cabinets, bathroom vanities, upholstered furniture and heavy trucks starting Oct. 1. Details were sparse and market reactions were modest, with truckmaker Paccar up 5.2% and drugmakers Eli Lilly and Pfizer rising.
Read at Fortune
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