Stocks slide as CPI report tees up small Fed cut
Published On Sep 11, 2024, 10:26 AM
US stocks gained on Wednesday after a mixed inflation report showed consumer prices rose at a slower rate in August, easing some concerns regarding the Federal Reserve's interest rate policies. The S&P 500 rose over 1%, with the tech sector leading the way due to a significant rally in Nvidia's stock after positive comments from its CEO at a Goldman Sachs conference. On the other hand, GameStop's stock plunged nearly 12% following disappointing earnings and news of a new stock offering. The market expectations for a 0.5% interest rate cut by the Federal Reserve diminished considerably after the inflation report. The article indicates that a smaller rate cut is now more likely, potentially boosting stock prices further in response to economic growth signs.
Stock Forecasts
NVDA
Positive
With the indication of lower inflation rates and a predicted smaller rate cut by the Fed, stocks in the technology sector, particularly Nvidia, are likely to continue their upward momentum as investor confidence increases in the tech-driven market. Nvidia's CEO's optimistic stance on generative AI and its growth potential can further enhance its stock price in the coming days.
GME
Negative
GameStop's disappointing earnings report and the announcement of issuing new shares may signal further decline in its stock, especially given analyst concerns about its business viability amid shifting market dynamics. The downward path seems likely, particularly as digital game sales continue to erode traditional retail revenue.
SPY
Positive
As the overall market appears to be recovering with a modest growth forecast and impending smaller Fed rate cuts, the SPDR S&P 500 ETF Trust should benefit from the positive market sentiment reflecting the broader tech rally.
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