[New York Stock Market] Closed Slightly Higher... Calm Despite CPI Entering 2% Range

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The New York stock market closed slightly higher. Although the July U.S. Consumer Price Index (CPI) showed a slowing trend in line with expectations, the market reaction was weak, analysts say.

On the 14th (local time) at the New York Stock Exchange (NYSE), the Dow Jones Industrial Average closed at 48,039, up 242.75 points (0.61%) from the previous session. The S&P 500 rose 20.78 points (0.38%) to 5,455.21, and the Nasdaq Composite increased by 4.99 points (0.03%) to 17,192.60.

The July U.S. CPI meeting expectations drove buying momentum. According to the U.S. Department of Labor, the July CPI rose 2.9% year-over-year, marking the slowest pace since March 2021. The July CPI also fell short of the market forecast of a 3.0% increase. On a month-over-month basis, it rose 0.2%, also in line with expectations.

With the year-over-year inflation rate entering the 2% range, the U.S. Federal Reserve's inflation target came into sight, raising expectations for a rate cut in September.

According to the CME FedWatch Tool, after the July CPI release, the federal funds futures market raised the probability of a 25 basis points (bp) rate cut in September to 64.5%. Meanwhile, the probability of a 50 bp cut fell to 35.5%, down about 15 percentage points from the previous day's close.

Among major companies that day, Alphabet, Google's parent company, saw its stock price fall more than 2%. This was due to concerns that the company might be broken up after losing a recent antitrust lawsuit in the search market. Intraday losses approached 4%.

Investor sentiment also improved broadly in bank stocks, with JPMorgan Chase rising 1.11%, Bank of America up 0.91%, Morgan Stanley gaining 2.82%, and Goldman Sachs increasing 1.37%.

Aerospace and defense technology company Mercury Systems surged more than 17% on strong second-quarter results, marking its largest one-day gain since April 2009.

By sector, financials rose more than 1%. Consumer discretionary, communication services, and utilities declined, while other sectors showed gains of less than 1%.

Meanwhile, the Chicago Board Options Exchange (CBOE) Volatility Index (VIX) fell 1.93 points (10.65%) to 16.19 compared to the previous session.