Joey Solitro
A solid week for stocks ended on a comparatively quiet note as investors took in another encouraging reading on inflation. With the pace of rising prices seemingly under control, the focus now shifts to the labor market and next Friday's release of the September jobs report.
Today, though, it was an inflation update that Wall Street was centered on. According to the Bureau of Economic Analysis, the Personal Consumption and Expenditures (PCE) Price Index increased by 0.1% in August from the month prior and was up 2.2% on an annual basis. Both figures were lower than what was seen in July.
Core PCE, which excludes volatile food and energy prices, increased 0.1% month over month and 2.7% year over year. While the monthly rise was slower than July's 0.2% gain, the annual increase was slightly faster.
Sign up for Kiplinger’s Free E-Newsletters
Profit and prosper with the best of expert advice on investing, taxes, retirement, personal finance and more - straight to your e-mail.
Profit and prosper with the best of expert advice - straight to your e-mail.
"The August PCE report supports the Fed's decision to go big on September 18, although the core year over year at 2.7% suggests that another round of 50 basis points needs to come under careful scrutiny unless the labor market suggests weakness," says Quincy Krosby, chief global strategist at LPL Financial.
Krosby adds that while the Fed "cannot declare complete victory on inflation," today's PCE data "underscores that overall inflation continues to move decisively in the right direction."
Costco falls after revenue miss
In single-stock news, Costco Wholesale (COST) stock fell 1.8% after the membership warehouse club's fiscal fourth-quarter revenue fell short of estimates. Still, the company beat on the bottom line.
"We look very favorably upon COST's long-term prospects," says Oppenheimer analyst Rupesh Parikh (Outperform, the equivalent of Buy). Among the many reasons he's bullish on the consumer staples stock are Costco's unique and improving consumer value proposition, open-ended worldwide growth prospects, and its leading competitive position that could drive share gains.
The analyst recommends clients "take advantage" of any post-earnings profit-taking on COST.
Super Micro bounces ahead of stock split
Elsewhere, Super Micro Computer (SMCI) stock rose 4.3% ahead of next week's 10-for-1 stock split. While stock splits are the equivalent of making change – 10 one-dollar bills for one $10 bill, for instance – it will bring SMCI's share price down to about $42 from its current perch near $420.
Shares have shed 65% since their mid-March peak, but Needham analyst Quinn Bolton remains bullish on the tech stock. "We view Super Micro as a significant beneficiary from growing investment in AI infrastructure and forecast a revenue compound annual growth rate (CAGR) in excess of 55% from fiscal 2021 to fiscal 2026," he wrote in a recent note.
Alibaba headed toward its best month in nearly two years
One of the most notable movers today was Alibaba Group Holding (BABA) stock, which added 2.2%. This extends the e-commerce giant's impressive September rally, with shares up 28.7% for the month to date, and puts BABA on pace for its best one-month return since December 2022 (+33.8%).
BABA was buoyed earlier this month by news it released open-source artificial intelligence (AI) models, while recently announced stimulus measures from the People's Bank of China also created tailwinds.
As for the main indexes, the Dow Jones Industrial Average gained 0.3% to 42,313 – a new record closing high – on strength in oil major Chevron (CVX, +2.5%) and insurance giant UnitedHealth Group (UNH, +1.2%). The S&P 500 slipped 0.1% to 5,738, while the Nasdaq Composite fell 0.4% to 18,119.
Related content
- Is Investing In Gold Worth It? How Gold Prices Have Changed
- What Is the Rule of 72 and How Is It Used in Investing?
- How to Spot a Bubble in Stocks
-
Stock Market Today: S&P 500 Nabs Longest Win Streak Since 2004The stock market's rebound from its mid-April tariff-induced lows has been nothing short of impressive.
-
Strong April Jobs Report Lowers Rate-Cut Hopes: What the Experts Are SayingDespite tariff uncertainty, the April jobs report showed hiring remained strong and gave the Fed a little extra wiggle room with interest rates.
-
Social Security Strategies for High-Net-Worth PeoplePeople who don't 'need' their Social Security may consider using their benefits to manage estate taxes and long-term care expenses.
-
How to Get Reliable Insurance InformationBefore you decide to buy insurance based on what some anonymous guy on social media says, think about the reliability of your source.
-
Stock Market Today: Dow, S&P 500 Extend Win Streaks to 8Strong earnings results for Magnificent 7 stocks Microsoft and Meta fueled upside in the equities market.
-
Vanguard Is 50! Here's How It Has Made Investing BetterVanguard was established by John C. Bogle in May 1975, and the fund manager's impact on investing has been revolutionary.
-
Have You Reviewed Your 401(k) Beneficiary Designations Lately?If you've had any life changes — marriage, divorce, a new baby or retirement — you might want to make sure your beneficiaries are in order.
-
How 401(k) Auto Portability Boosts Women's Retirement SavingsWomen already face an uphill battle when saving for retirement. Auto portability tech transfers their 401(k)s when they change jobs, which can add up over time.
