Stock Market This Week (US): Slowdown in inflation led the US markets higher

Stock Market This Week (US)

It was another excellent week for investors as the S&P 500 rose 3.3% for the week. It is its longest weekly winning streak since November 2021. The Dow was up 2.92%, while the Nasdaq Composite moved higher by 3.1% for the week.

US stock market this week: Stocks movement this week

The US market started the week on Monday on a positive note but gave up gains to close near flat. Investors waited for three big inflation readings in the week - CPI, PPI, and unit labour costs. Some big names to report their earnings this week.

US stocks fell on Tuesday as many companies reported disappointing results ahead of key inflation numbers. Market pros expected the inflation report to provide clues about how aggressive the Federal Reserve will need to be in its fight against inflation. 

The much-awaited inflation numbers were announced on early Wednesday morning, and stocks rose sharply as the data showed a better than expected slowdown in rising prices. All major indices were up more than 1.5%. Major tech stocks outpaced the broader market with Meta rising more than 5% and Netflix gaining more than 6%.

After the positive rally yesterday, the market struggled to find direction on Thursday. All major indices started on high but lost steam later to close flat - the S&P 500 and Dow ended nearly flat, while the Nasdaq slipped about 0.6%.

The US stocks rose sharply on Friday as investors celebrated signs that inflation may be peaking. The positive news has increased investor confidence, leading some to believe that the recent gains are more than a typical bear market rally.

US stock market this week: Major events

Quarterly results: More than 87% of companies have reported their June quarter earnings, and we are coming close to the end of the quarterly result season. Chipmaker Micron reported lower-than-expected earnings and warned that revenue may fall short of its prior guidance. Disney's share price surged after the company reported earnings that were higher than Wall Street estimates on both bottom and top lines.

Inflation numbers: The consumer price index rose 8.5% in July from a year ago, below expectations, due largely to slumping energy prices. Excluding volatile food and energy prices, the so-called core CPI rose 5.9% annually and 0.3% monthly. The jump in the food index put the 12-month increase to 10.9%, the fastest pace since May 1979. Despite the monthly drop in the energy index, electricity prices rose 1.6% and were up 15.2% from a year ago. 

Unemployment claims: Labour Department data showed that initial unemployment claims increased by 14,000 to 262,000 in the week ended August 6. Jobless claims have been rising as more companies, particularly in the tech sector, announce layoffs and freeze hiring due to economic uncertainty. On an unadjusted basis, initial claims increased to 203,619 last week. Massachusetts posted the largest increase, followed by California.

Treasury yields: US Treasury yields moved lower this week as market participants sorted through a busy week of economic data. The yield on the benchmark 10-year Treasury note dipped to 2.84%. The yield on the 30-year Treasury bond also stood at 3.108%. Yields move inversely to prices, and a basis point is equal to 0.01%.