US Stocks Rebound After Volatile Week
Following a turbulent week in global markets, US stocks have staged a remarkable comeback. The Dow Jones Industrial Average is back above 40,000, and all three major indexes have notched their best weekly performance this year.
The rebound comes after a series of encouraging economic data releases, including a better-than-expected retail sales report and signs of cooling inflation. The Consumer Price Index (CPI) rose 2.9% for the 12 months ended in July, marking the first time it dipped below 3% since March 2021.
This positive economic news has eased concerns about a potential recession and fueled optimism that the Federal Reserve may cut interest rates in September. However, some Fed officials remain cautious, emphasizing the need for further progress on lowering inflation.
Investors are now looking ahead to the Fed's next meeting in September and Chair Jerome Powell's speech at the Jackson Hole economic summit next week. Powell's remarks have historically influenced market movements, and his upcoming speech could provide further clues about the Fed's future policy direction.
In other news, US crude oil prices fell this week after OPEC lowered its global oil demand growth forecast for 2024 and 2025. Meanwhile, Starbucks shares soared after the company announced a new CEO, Brian Niccol, who previously led Chipotle through a successful turnaround. Walmart shares also jumped after reporting strong quarterly sales and operating income.