THE GIST (“THE WHAT”)
Gapping higher at the open, the S&P 500 index held on to the gains as investors cheered the latest inflation report that indicated that consumer prices slowed more than expected in June. The index notched new highs for the year amid increasing odds that the Fed might by nearing an end to its interest rate hiking cycle, closing the session at 4472.15, up 32.90 points (0.74%).
Note: Our daily “S&P 500 Trading plan” will be posted around 9:30/10:00am EDT, every trading day.
Trading Plans for WED. 07/12: Inflation Tame. Next Question – Earnings Soft?
For the last published Results of the Morning Trading Plans, please click here
THE DETAILS (The “How & Why”):
CPI index for the month of June rose 3% on an annual basis, the smallest year-on-year increase since March 2021 and down from a 4% increase in May. June CPI index excluding food and energy also eased from 5.3% in May to 4.8% in June.
Speculation that the Fed might be nearing the end of its monetary tightening cycle pushed yields lower and fueled the rally in stocks. Homebuilding stocks gained alongside falling yields. DR Horton rose 3.60%. Lennar Corp, Toll Brothers and Pulte Group all gained more than 2% each.
Falling yields also sparked a rally in mega-cap tech stocks. Meta Platforms Inc and Nvidia Corp jumped more than 3% each. Microsoft, Alphabet, Apple, and Google all closed more than 1% higher.
Domino’s Pizza was the strongest performer of the session, rising sharply by 11.15% following reports that the pizza restaurant chain has partnered with Uber Eats and Postmates that will let its customers order food by 2024. Meanwhile, gold and copper prices hit 3-week highs, boosting mining stocks higher. Newmont led the sector higher with a 4% gain.
Capping the day’s gains, cybersecurity stocks tumbled after Microsoft announced new services in the cybersecurity space. Pal Alto Networks, Zscaler, Fortinet, and Crowdstrike Holding all fell more than 2% each.