US stocks edge higher after benign CPI release; Fed decision in focus

U.S. stocks traded marginally higher Wednesday as investors digested the latest consumer inflation data, amid expectations that the Federal Reserve will ease monetary policy next month.

At 09:35 ET (13:35 GMT), the Dow Jones Industrial Average traded 16 points, or 0.1%, higher, the S&P 500 rose 8 points, or 0.2% and NASDAQ Composite climbed 40 points, or 0.2%. CPI data confirms cooling pressures

U.S. consumer prices increased by less than expected on an annualized basis in July, with the July consumer price index rising by 2.9%, decelerating slightly from 3.0% in June. Economists had predicted that the figure would match June's rate.

Stripping out more volatile items like food and fuel, the "core" number climbed by 3.2% in the twelve months to July, below projections of 3.3%. 

While this release confirmed the generally benign inflationary pressures, after Tuesday’s cooler-than-expected July producer price index, expectations had been growing for an even sharper drop.

The U.S. Federal Reserve is widely expected to cut its policy rate in September from the 5.25%-5.50% range it has been in for more than a year, but there remains some uncertainty over the size of the reduction.

Traders are split over a 25 and 50 basis point cut in September, CME Fedwatch showed. Intel sells Arm stake

In the corporate sector, Intel (NASDAQ:INTC ) sold its 1.18 million share stake in British chip firm Arm Holdings (NASDAQ:ARM ) in the second quarter, a regulatory filing showed on Tuesday.

The chipmaker said earlier this month that it would cut more than 15% of its workforce and suspend its dividend amid a pullback in spending on traditional data center semiconductors and a shift towards AI chips.

The Wall Street Journal reported that chocolate giant Mars is looking to pay $83.50 for each share in packaged foods maker Kellanova (NYSE:K ), a 12% premium to Tuesday’s close, while valuing the firm at over $30 billion. Crude rise on US inventories draw

Crude prices rose Wednesday, buoyed by the benign inflation data as well as a bigger-than-expected draw in U.S. stockpiles.

By 09:35 ET, the U.S. crude futures (WTI) climbed 0.1% to $78.44 a barrel, while the Brent contract rose 0.2% to $80.86 a barrel.

Data from the American Petroleum Institute showed U.S. oil inventories shrank by 5.2 million barrels in the week to August 10, much more than expectations for a draw of 2 million barrels.

The reading, if confirmed by official inventory data later in the day, showed that demand remained robust in the world’s biggest fuel consumer, even as the travel-heavy summer season wound down.

(Ambar Warrick contributed to this article.)

Source: Investing.com