Day Traders Diary

8/10/22

The major averages rose sharply on Wednesday after a key inflation reading showed a better-than-expected slowdown for rising prices. The Dow Jones Industrial Average jumped 535 points, or roughly 1.6%. The S&P 500 gained 87 points or 2.1%, hit its highest level since early May, while Nasdaq Composite jumped 360 points 2.9%.

The headline consumer price index for July rose 8.5% year over year, and was flat compared to June. Economists surveyed by Dow Jones were expecting increases of 8.7% and 0.2%, respectively.

Core inflation, which strips out volatile food and energy prices, also saw a smaller-than-expected increase.

The Federal Reserve will weigh the report, along with other key economic data, ahead of its September meeting where it is slated to hike interest rates again.

Major tech stocks were outpacing the broader market on Wednesday, with Facebook-parent Meta rising 5.7% and Netflix gaining more than 4%. Salesforce was the best performer in the Dow, rising 3.6%.

The Cboe Volatility Index is holding below 20 in the final minutes of trading. This would be the first time in 90 days it has closed below that level. Since 1990, that would be the 10th longest such streak, according to Bespoke Investment Group.

With about an hour left in Wednesday's trading session, the Dow is holding onto a rally of more than 400 points. The S&P 500 and Nasdaq Composite are having even better days, raising 1.8% and 2.5%, respectively.

Small caps are also having a banner day, with the Russell 2000 up 2.7%.