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: Stocks Rally Despite Rising Geopolitical TensionThe main indexes were mixed on Tuesday but closed well off their lows after an early flight to safety.
-
What's at Stake for Alphabet as DOJ Eyes Google's ChromeAlphabet is higher Tuesday even as antitrust officials at the DOJ support forcing Google to sell its popular web browser. Here's what you need to know.
-
Stock Market Today: Stocks Rally Despite Rising Geopolitical Tension
The main indexes were mixed on Tuesday but closed well off their lows after an early flight to safety.
-
What's at Stake for Alphabet as DOJ Eyes Google's Chrome
Alphabet is higher Tuesday even as antitrust officials at the DOJ support forcing Google to sell its popular web browser. Here's what you need to know.
-
Lowe's Stock Is Falling After Earnings. Here's WhyLowe's stock is lower Tuesday as Wall Street weighs a beat-and-raise quarter against declining revenue. This is what you need to know.
-
Why Walmart Stock's a Buy After Its Beat-And-Raise QuarterWalmart is the best Dow Jones stock Tuesday after the retail giant's solid earnings report and outlook and Wall Street thinks it's just getting started. Here's what they're saying.
-
Winners and Losers of Fed Rate CutsNavigating interest-rate changes can seem daunting, but these areas of the fixed-income market could perform better (or worse) than others.
-
Six Ways to Optimize Your Charitable Giving Before Year-EndAs 2024 winds down, right now is the time to look at how you plan to handle your charitable giving. The sooner you start, the more tax-efficient you can be.
-
How Preferred Stocks Can Boost Your Retirement PortfolioHigher yields, priority on dividend payments and the potential for capital appreciation are just three reasons to consider investing in preferred stocks.
-
Structured Settlement Annuity vs Lump-Sum Payout: Which Is Better?As the use of structured settlement annuities grows, it can be tough to decide whether to take the lump sum to invest or opt instead for guaranteed payments.
