Stock Market Today: Stocks Rise on Inflation Data, Retail Earnings

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Stocks bolted out of the gate Tuesday after another data point showed inflation eased in October. The major markets pared some of these earlier gains in afternoon trading amid reports Russian missiles crossed into Poland, a member of NATO, but they still managed to end the day higher.

What Happens to Stocks if the Fed is Wrong About Inflation?

The Labor Department this morning said its producer price index (PPI), which measures what suppliers are charging businesses and other customers for goods and services, rose 8% year-over-year in October. This was slower than September's 8.4% increase. On a monthly basis, the PPI accelerated 0.2%, matching last month's number. Core PPI, which excludes volatile energy and food prices, also rose at a slower pace than what was seen in September.

"The PPI read certainly adds more fuel to the fire for those who feel we may finally be on a downward inflation trend," says Mike Loewengart, head of model portfolio construction at Morgan Stanley. "The market embraced last week's consumer downtick and today's initial reaction seems to be more of the same as expectations rise that the Fed could pull back from 75 basis point hikes next month, especially considering [Federal Reserve Board Vice Chair Lael] Brainard's comments on slowing the hikes yesterday."

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The market also responded positively to third-quarter earnings beats from retail giants Home Depot (HD, +1.6%) and Walmart (WMT, +6.5%). These results come ahead of a busy stretch of retail earnings, with Lowe's (LOW, +2.0%) and Target (TGT, +4.0%) on deck to unveil their Q3 financial results.

At the close, the Dow Jones Industrial Average was up 0.2% at 33,592, the S&P 500 Index was 0.9% higher at 3,991, and the Nasdaq Composite had gained 1.5% to 11,358.

Warren Buffett's Q3 Buys and Sells

The Nasdaq's outperformance came largely at the hands of semiconductor stocks. And the most talked about chipmaker today was Taiwan Semiconductor Manufacturing (TSM), which rallied 10.5% on news that one of Wall Street's most revered investors took a massive stake in the company.

The 15 Best Stocks to Buy for the Rest of 2022

Specifically, Warren Buffett's Berkshire Hathaway (BRK.B) late Monday filed its latest Form 13F, a quarterly disclosure the Securities and Exchange Commission (SEC) requires of all institutional investors with $100 million or more in assets. The regulatory filing revealed that Buffett bought 60.1 million shares in the world's biggest semiconductor manufacturer, making TSM the 10th largest position in the Berkshire Hathaway equity portfolio.

This wasn't the only move Buffett & Co. made in the third quarter, though. Here, we take a closer look at all the stocks Warren Buffett bought and sold in Q3, including the one position he completely exited. Check them out.

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With over a decade of experience writing about the stock market, Karee Venema is the senior investing editor at Kiplinger.com. She joined the publication in April 2021 after 10 years of working as an investing writer and columnist at a local investment research firm. In her previous role, Karee focused primarily on options trading, as well as technical, fundamental and sentiment analysis.