U.S. Stocks Rally Extend to 5th Session, Fed's Inflation Measure Inches Higher

Barry Adams
31 Aug, 2023
New York City

Market averages traded higher on the final day of the month as indexes are likely to stretch the latest winning streak to the fifth session in a row. 

The latest market gains helped the S&P 500 index trim its August losses to 1% and the Nasdaq to 2% after a rally in tech stocks lifted broader indexes. 

Core personal consumption expenditures index increased 0.2% in July from the previous month and jumped 4.2% from a year ago, the U.S. Bureau of Economic Analysis reported Thursday. 

The core PCE index, which significantly understates inflation felt by most families, is the preferred inflation measure of the Federal Reserve. 

The PCE index increased 0.2% from the previous month and rose 3.3% from a year ago. 

The inflation reading shows prices are still rising at a faster pace, despite multiple rate hikes over the last sixteen months. 

In other economic news, initial jobless claims adjusted for seasonal factors declined 4,000 to 228,000 in the week ending on August 26, the Labor Department reported Thursday. 

Meanwhile, continuing claims  rose 28,000 from the previous week's downwardly revised to 1.725 million in the week ending on August 19. 

 

U.S. Indexes & Yields 

The S&P 500 index traded up 0.3% to 4,528.90 and the Nasdaq Composite gained 0.5% to 14,095.94. 

The yield on 2-year Treasury notes decreased to 4.89%, 10-year Treasury notes inched lower to 4.09% and 30-year Treasury bonds edged down to 4.20%. 

West Texas Intermediate crude oil and Brent crude oil prices hovered near the levels last seen In April after a larger-than-expected weekly drawdown of weekly crude supplies last week. 

Crude oil increased $1.48 to $83.11 a barrel and natural gas prices decreased 3 cents to $2.76 a thermal unit. 

 

U.S. Stock Movers 

Salesforce Inc jumped 4.9% to $226.0 after customer management software developer reported better-than-expected sales and earnings. 

Revenue increased to$8.6 billion and adjusted diluted earnings per share of $2.12. 

Costco Wholesale Corp increased 0.3% to $544.18 after the membership discount wholesale club said August sales increased 5% to $18.42 billion. 

Five Below Inc declined 4.5% to $174.88 after the deep discount retailer forecasted weak third quarter results. 

The retailer estimated revenue to fall between $715 million and $730 million and earnings per share between 17 cents and 25 cents, sharply lower than estimates set by some analysts. 

Victoria's Secret & Company declined 4.9% to $17.06 after the lingerie retailer reported disappointing second quarter results. 

The specialty retailer reported revenue of $1.43 billion and adjusted earnings per share of 26 cents. 

Chewy Inc dropped 15.1% to $23.12 after the online pet food retailer said second quarter sales of $2.78 billion and diluted earnings per share of 4 cents. 

Okta Inc jumped 14.2% to $83.83 and the identity access management reported sales and earnings ahead of market expectations. 

Second quarter revenue increased to $556 million and adjusted earnings per share of 31 cents. 

Crowdstrike Holdings Inc jumped 7.6% to $160.21 after the cybersecurity company reported better-than-expected revenue and earnings. 

The company reported second quarter adjusted earnings per share of 74 cents on revenue of $734 million.