Inflation Impact... S&P 500 Nears Record High (Comprehensive)

[Image source=Reuters Yonhap News]

[Asia Economy New York=Correspondent Baek Jong-min] Unexpected inflation drove up the U.S. stock market. The S&P 500 index is on the verge of breaking its previous high.

On the 12th (local time), the Dow Jones Industrial Average rose 289.93 points (1.05%) to close at 27,976.84, the S&P 500 index increased by 46.66 points (1.4%) to 3,380.35, and the Nasdaq index surged 229.42 points (2.13%) to finish at 11,012.24. The S&P 500 index came very close to its all-time closing high of 3,386.15 points recorded in February.

The stronger-than-expected U.S. inflation data led the market rally.

The Consumer Price Index (CPI) for July, released by the Department of Labor, rose 0.6% compared to the previous month. This far exceeded the market expectation of a 0.3% increase, marking the second consecutive month of growth. This is the highest monthly increase in about 30 years since January 1991.

The inflation rise was interpreted as a sign that economic recovery is underway despite the resurgence of COVID-19.

Larry Kudlow, chairman of the White House National Economic Council (NEC), assessed that the U.S. economy appears to have entered a stage where it can recover on its own without large-scale stimulus measures.

The Wall Street Journal analyzed that the Democratic presidential candidate Joe Biden’s selection of Senator Kamala Harris as his vice-presidential running mate also had a positive impact on the stock market. Wall Street views Senator Harris as more moderate compared to other candidates like Elizabeth Warren.

By individual stocks, Apple rose by 3.3%, and Tesla, which decided on a stock split, soared by 13.1%. Both companies are showing strength fueled by the stock split news.

West Texas Intermediate (WTI) crude oil for September delivery closed at $42.67 per barrel, up 2.6% ($1.06) from the previous trading day. December gold closed at $1,952.70 per ounce, up 0.3% ($6.40) from the previous day.

This content was produced with the assistance of AI translation services.