U.S. Indexes Rise on Softer Producer Prices Data

U.S. stock indexes reached a nearly two-week high on Tuesday, driven by softer producer prices that suggested a moderation in inflation. This has strengthened bets of an interest-rate cut by the Federal Reserve in September. Investors are now focusing on forthcoming consumer-price figures and retail sales data to confirm the possibility of an aggressive rate cut.

U.S. stock indexes closed higher on Tuesday, achieving a near two-week high after softer producer prices data bolstered expectations for a September interest-rate cut by the Federal Reserve.

The U.S. producer prices rose less than anticipated in July, with a 2.2% increase from the previous year, down from 2.7% in June, indicating a moderation in inflation. This spurred investor optimism for a rate cut, with traders now seeing a 55% chance of a 50-basis-point reduction.

Investors eagerly await consumer-price figures on Wednesday and retail sales data on Thursday, which are expected to solidify bets on an aggressive Fed rate cut. Notably, Starbucks led the S&P 500 with significant gains following the appointment of Chipotle's Brian Niccol as CEO, while BuzzFeed shares surged after narrowing its net loss.