US stocks close higher after worst rout in 2 years as investors assess impact of August inflation on Fed's next move
- US stocks finished higher Wednesday a day after the market's worst session in two years.
- Producer price data Wednesday showed cooling wholesale inflation, but markets are still digesting Tuesday's CPI report.
US stocks closed with modest gains Wednesday, slightly rebounding from the market's worst session in two years amid volatile trade.
Indexes opened higher, then turned negative before swinging back to positive territory in the final minutes of the session. Early Wednesday, the producer price index fell 0.1% in August from the prior month, matching expectations. But markets were still digesting Tuesday's consumer price index report, which showed a surprise monthly increase that cemented views for another big rate hike at next week's Federal Reserve meeting.
While investors are still mostly betting on a third consecutive increase of 75 basis points, the odds of a 100-basis-point hike have climbed since Tuesday.
Here's where US indexes stood as the market closed at 4:30 p.m. on Wednesday:
- S&P 500: 3,946.01, up 0.34%
- Dow Jones Industrial Average: 31,135.09, up 0.10% (30.12 points)
- Nasdaq Composite: 11,719.68, up 0.74%
Nomura strategist Charlie McElligott says the market is starting to acknowledge that a hard landing is likely, as the latest consumer price index report Tuesday showed that inflation remains a persistent issue that the Fed will need to stay aggressive on.
And acclaimed investor Mark Mobius thinks the Federal Reserve could hike interest rates as much as 9% if consumer inflation remains around 8%.
Elsewhere, the European Union is seeking $140 billion worth of windfall taxes from low-cost energy companies to shield consumers from the continent's surging energy prices.
Oil climbed, with West Texas Intermediate gaining 0.74% to $87.94 per barrel. International benchmark Brent crude gained 0.71% to $93.82.
Gold fell 0.42% to $1,694.43 an ounce. The 10-year yield fell 1.7 basis points to 3.406%.
Bitcoin gained o.o3% to $19,848.02.