All three major indexes rose, as of press time, the Dow rose by 0.96%, the Nasdaq rose by 1.32%, and the S&P 500 index rose by 0.71%.
On Tuesday's economic data front, US producer price index (PPI) for July rose less than expected, highlighting the continued easing of inflation pressure.
The PPI index, which measures wholesale prices and represents final demand, rose 0.1% from the previous month. The median forecast of economists surveyed by institutions was for growth of 0.2%. In addition, compared with a year ago, PPI rose 2.2% in July.
Excluding volatile food and energy categories, PPI for July was unchanged from the previous month, the mildest reading in four months.
More closely watched consumer price index (CPI) data will be released on Wednesday, with the index expected to show a small increase. Against the backdrop of receding inflation pressure, weak jobs data in July prompted economists to predict that the Fed will begin a series of rate cuts from next month.
Previously, the market was oscillating between a 25 basis point rate cut by the Fed and a 50 basis point rate cut at its September meeting. They expected year-end rates to be between 4.25% and 4.50%.
The NFIB Small Business Confidence Index rose 2.2 points to 93.7, rising for the fourth consecutive month and setting a new record for the longest consecutive rise since the outbreak of the epidemic.
Although companies remain pessimistic about future business conditions, the proportion of companies expecting the economy to deteriorate has fallen to its lowest level since November 2020. This factor is almost entirely due to the rise in the confidence index, while four of the other ten sub-indices that make up the overall confidence index also improved in July. In addition to economic expectations, the net proportion of businesses expecting sales growth in the coming months rose to its highest level this year.
The confidence index, while still below pre-epidemic levels, rose with good news on inflation. The report showed that the net proportion of companies planning to raise prices fell to 24%, its lowest level since April 2023. Smaller proportions of companies reported price increases last month.
Companies continue to cope with unfavorable factors such as prices, interest rates, and labor costs. One-quarter of business owners said inflation was the biggest single issue they faced in July, up 4 percentage points from the previous month.
The proportion of companies unable to fill job vacancies rose slightly, but remained near the lowest level since early 2021. Recruitment plans remain stable.
Wednesday's expected release of the consumer price index is expected to show a 0.2% increase over the previous month, up from a 0.1% decline last month. After last week's turbulent market, these data may provide some direction to uncertain markets.
Cameron Dawson, chief investment officer at NewEdge Wealth, said, "The market was a bit oversold last week. But if you look at the percentage of stocks trading above the 50-day moving average, we're not really oversold -- it just means we haven't seen a true ace yet."
According to a global survey by Bank of America, despite the volatility of global financial markets, investors' optimism towards US tech giants and their expectations for a soft landing of the economy have not weakened. The survey was conducted from August 2nd to August 8th and covered last week's "Black Monday." The survey shows that investors are turning to bonds and cash, withdrawing funds from stocks, but betting on the rise of the "Big Seven" tech stocks is still the most crowded trade, although this bet has decreased after the sell-off.
Michael Hartnett, a strategist at Bank of America, wrote in a report that optimism about a soft landing and large US growth stocks had not changed. Investors now simply believe that the Fed needs to cut interest rates more to prevent a recession.
The survey covered 189 participants with a total asset value of $508 billion. The results showed that the expectation of a soft landing increased from 68% in July to 76%. However, participants' expectations for global growth have declined significantly, with 47% of respondents expecting the economy to weaken in the next 12 months. The US economic recession has replaced geopolitical conflict as the biggest tail risk.
Scott Rubner, Managing Director and Strategy Expert of Goldman Sachs' Global Markets Division, said on Monday that as systematic funds sold off and companies increased their share buybacks, investors would have a brief window at the end of August to buy US stocks. "This will be my last bearish view of the August stock market because the period when supply and demand mismatched in August is coming to an end," he said.
"This will be my last bearish view of the August stock market because the period when supply and demand mismatched in August is coming to an end," he said. He will switch to a tactical call on the stock market on August 30. Rubner had recommended reducing exposure to the US stock market after July 4, and believed that the market was in the last phase of its rally until July 17.
Star tech stocks rose across the board, with Nvidia up more than 3%, META up more than 2%, Intel and Apple up nearly 2%.
Focus stocks
China concept stocks rose across the board, with bilibili up more than 4%, Jike up more than 3%, NIO and Xpeng up nearly 3%.
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