The Dow Jones Industrial Average finished Wednesday morning flat while the Nasdaq Composite and S&P 500 rallied on cooler-than-expected inflation data. Six stocks accounted for nearly all of the Nasdaq's gain, while losses in Caterpillar and Goldman Sachs held the price-weighted Dow back.
Cooler-than-forecast inflation data hit the tape Wednesday morning, and two of the three major indexes moved on it immediately. The Dow Jones Industrial Average, however, did not.
Indices split as Dow stays flat
The Nasdaq Composite climbed 1.1% as of 12:05 p.m. ET. The S&P 500 added 0.6% over the same stretch. The Dow Jones Industrial Average sat exactly flat, with its 30 components split 15 up and 15 down.
Cooler inflation pushes the next rate hike to December
Core PCE, the inflation gauge the Fed watches most closely, rose just 0.2% in August for an annual rate of 3%, below the 0.3% and 3.3% economists expected. As a result, Treasury yields dropped, and traders moved their next expected rate hike from October to December.
Context tempers the reading, though. The Bureau of Economic Analysis changed how it measures prices for legal services, software, and computer accessories, a revision that lowered July core PCE by 0.36 percentage points. The data also predates September's surge in diesel prices.
Six stocks carried the Nasdaq while the Dow lagged
Alphabet jumped about 3.1% after signing a White House AI accord that includes audit commitments, and Apple rose 2.4%, erasing Tuesday's drop. Add Nvidia's 1.6% gain, Microsoft's 1.9% rise, and Amazon's 2% rise, and six stocks accounted for 1.11 percentage points of the Nasdaq's 1.14% gain.
The Dow told the other half of the story. Caterpillar and Goldman Sachs each fell roughly 1%, canceling out the gains from Alphabet, Microsoft, and Apple in the price-weighted average. Zooming out further, equal-weight S&P 500 funds slipped slightly while the cap-weighted version rose 0.6%, underscoring how narrow Wednesday's advance really was.
Micron reports fiscal fourth-quarter results after Wednesday's close, and whatever it says will surely move the market Thursday. September's jobs report follows on Friday.
Source: The Motley Fool
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