U.S. inflation growth decreased in July, and with AI-related firms continuing to announce robust earnings, tech stocks performed well in the New York stock market on the 12th (local time). AI cloud company CoreWeave and server manufacturer Supermicro climbed more than 19% each, while SK Hynix American Depositary Receipt, ADR, also increased by 9%.
On this day, the Nasdaq index, which is heavily weighted towards technology stocks, ended at 26,588.49 in the New York stock market, gaining 143.04 points, or 0.54%, compared to the previous trading day. The S&P 500 index also increased by 20.30 points, or 0.26%, reaching 7,748.50. Meanwhile, the Dow Jones Industrial Average closed just slightly lower, dropping 21.58 points, or 0.04%, to 53,770.27.
The inflation figures that influenced the market today met predictions. As reported by the U.S. Department of Labor, the July Consumer Price Index (CPI) increased by 3.4% compared to the same month in the prior year. This growth rate was a slight decrease from 3.5% in June and matched market expectations. It also saw a 0.1% rise from the previous month. The core CPI, which excludes fluctuating food and energy costs, climbed 2.5% over the past year and 0.2% from the prior month. The annual increase for the core CPI also decreased from 2.6% in June.
Higher oil prices have sparked worries that the Federal Reserve could restart increasing interest rates because of rising inflation, but today’s CPI figures have somewhat reduced these concerns. As per the CME FedWatch, the likelihood of the Federal Open Market Committee, FOMC, maintaining interest rates steady in September, as shown by the interest rate futures market, has increased to approximately 60%. The present U.S. base interest rate stands at 3.50–3.75% per year.
Ellen Zentner, the chief economist at Morgan Stanley Wealth Management, stated to CNBC, “If inflation remains in line with predictions, it will support the view that ‘there is no need to increase interest rates,’ a perspective that became stronger following last week’s employment data,” she added, “Although there will be one more inflation report before the September FOMC meeting, if the findings are not markedly different, the Fed will be in a position to hold interest rates steady next month.”
However, continued high global oil prices still pose an uncertainty. Brent crude for October delivery increased by 0.1% compared to the last trading day, reaching $88.98 per barrel, getting close to the $90 mark. Even though predictions indicate lower oil demand, prices have not dropped much because talks to restart shipping through the Hormuz Strait are still stalled.
A key factor influencing the market on this day was artificial intelligence. With AI-related companies releasing stronger-than-anticipated financial results and projections, investor confidence in the recently unstable “AI boom” was rekindled.
The AI cloud company CoreWeave experienced a 19.3% increase in its stock price, as its second-quarter revenue doubled compared to the same period last year, and its adjusted operating profit margin surpassed market expectations. Server manufacturer Supermicro컴퓨터 also saw a 19% rise following the announcement of first-quarter earnings forecasts that exceeded market expectations.
Investor enthusiasm extended to stocks connected with artificial intelligence. Dell Technologies climbed approximately 10%, while U.S.-based memory semiconductor firm Micron Technology saw a rise of 4.9%. Cisco Systems also experienced a gain of around 3%. Significantly, SK Hynix ADR spiked by 9.0% on that day. Shares of Nebius, a Dutch AI cloud company listed in the U.S., soared by 34%.
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