Stock market today: Wall Street poised for gains on strong earnings reports ahead of inflation data

AP Business Writers

Wall Street is solidly higher before the opening bell Friday as a broad range of companies posted strong earnings and new data showed that inflation continues to cool, boosting the odds for a September cut to interest rates by the U.S. Federal Reserve.

Futures for the S&P 500 advanced 0.8% while futures for the Dow Jones Industrial Average climbed 0.6%. Nasdaq futures rose 1.1% and global markets mostly gained.

The Federal Reserve’s favored inflation measure remained low last month, bolstering evidence that price pressures are steadily cooling and setting the stage for the Fed to begin cutting interest rates this fall.

Prices rose just 0.1% from May to June, the Commerce Department said Friday, up from the previous month’s unchanged reading. Compared with a year earlier, inflation declined to 2.5% from 2.6%.

Cuts to rates would release pressure that’s built up on both the economy and financial markets, and investors are thinking it would be a big boost for stocks whose profits are more closely tied to the strength of the economy than Big Tech’s.

Decker Outdoors rose 12.3% after it breezed past Wall Street’s earnings expectations on the strength of its Ugg and Hoka brand footwear. The California company also raised its full-year profit guidance.

Norfolk Southern jumped 6.8% after its second-quarter results got a boost from insurance payments related to last year’s disastrous East Palestine derailment. The company also made progress in reducing its expenses and improving effeciency.

Newell Brands climbed 11.8% after the owner of Coleman camping supplies and Sharpie markers easily topped analysts’ profit targets. Its shares are still down about 18% this year.

Continued losses for Nvidia and most of the handful of Big Tech stocks that have been primarily responsible for the S&P 500’s run to records this year have recently weighed on the market. They tumbled a day earlier after profit reports from Tesla and Alphabet underwhelmed investors, raising concerns that the market’s frenzy around artificial-intelligence technology had sent prices too high.

Whether the handful of stocks known as the “Magnificent Seven” are rising or falling makes a huge impact on Wall Street because they’ve grown so mammoth in market value. That gives their stock movements extra sway on the S&P 500 and other indexes.

In Europe at midday, Germany’s DAX turned 0.4% higher and the CAC 40 was up 0.9%. In London, the FTSE also advanced 0.9%.

In Asian trading, Tokyo’s Nikkei 225 index gave up early gains to slip 0.5% to 37,667.41. It sank 3.3% the day before amid heavy sell-offs in many world markets.

Tokyo’s core consumer price index rose 2.2% in July, rising for the third straight month to its highest level in four months, adding to expectations that the Bank of Japan may raise its near-zero benchmark interest rate at a policy meeting next week.

Hong Kong’s Hang Seng edged 0.1% higher, to 17,021.31, while the Shanghai Composite index also added 0.1%, to 2,890.90.

Australia’s S&P/ASX 200 surged 0.8% to 7,921.30, while the Kospi in Seoul added 0.8% to 2,731.90.

Taiwan’s Taiex sank 3.3% as it reopened after markets there were closed Thursday due to a typhoon. It was catching up with the retreat on Wall Street on Wednesday, which was the S&P 500’s worst plunge since 2022. Taiwan Semiconductor Manufacturing Corp. plunged 5.6%, tracking continued declines in Big Tech companies.

In Bangkok, the SET rose 0.9%, while India’s Sensex gained 1.4%.

U.S. benchmark crude oil shed 28 cents to trade at $78 per barrel on the New York Mercantile Exchange.

Brent crude, the international standard, lost 36 cents to hit $81.03 per barrel.

The U.S. dollar rose to 154.54 Japanese yen from 153.93 yen. The euro rose to $1.0864 from $1.0847.

On Thursday, the majority of U.S. stocks rallied after a surprisingly strong report on the U.S. economy raised hopes for profits of smaller companies’ other formerly unloved areas of the market.

The S&P 500 lost 0.5% following its Wednesday slide, while the Dow added 0.2% and the Nasdaq composite sank 0.9%.

The Russell 2000 index of smaller stocks jumped 1.3%. It’s up 8.6% this month, versus a loss of 1.1% for the big stocks in the S&P 500.