US open: Stocks lifted early on by inflation relief

(Sharecast News) - US stocks rose on Thursday morning after a closely watched economic indicator raised hopes that the Federal Reserve would hold back from further tightening monetary policy next month. The Dow Jones was up 1% at 35,345.1 in early trade, while the S&P 500 gained 0.9% to 4,509.62 and the Nasdaq rose 1.1% to 13,868.84.

US consumer prices rose just 0.2% in July, according to the US Bureau of Labor Statistics, remaining steady with June's reading. Stripping out food and energy, core inflation was also unchanged from the previous month at 0.2% Compared with July 2022, CPI inflation rose slightly to 3.2%, from 3% the month before, while core CPI slowed to 4.7% from 4.8%.

All figures came in broadly in line with consensus estimates, raising hopes that the Fed would choose to pause from any further rate hikes at hits policy meeting in September.

"Overall, there's nothing here to suggest the Fed needs to push ahead with further interest rate hikes this year," said analysts at Capital Economics.

Treasury yields declined after the news, with the yield on a two-year Treasury note falling 4 basis points to 4.77%.

In other economic news, initial jobless claims came in at 248,000 in the week ended 5 August, according to the Department of Labor. The number of people filing to receive unemployment insurance benefits for the first time increased 21,000 from 227,000 the week before. Economists had pencilled in a much smaller increase to just 230,000.

Looking ahead, US producer price inflation figures are due out on Friday.

In stock movements, Disney was trading higher after announcing that it was cutting costs and raising prices. The entertainment giant did swing to a net loss of $460m in its third quarter, down from a profit of $1.4bn a year before, but assured investors that it was on track to pull back on spending for the year. Morgan Stanley reiterated its 'overweight' stance on the stock after the news.

Michael Kors owner Capri Holdings surged over 50% after Tapestry announced a takeover of the luxury group for $8.5bn - or $57 a share - through a mixture of new debt and cash.

Retail behemoth Amazon rose on reports that it is cutting 27 of its 30 clothing brands and removing private-label furniture.