Investing Update

Investing.com– The S&P 500 closed higher on Friday, ending August with a fourth consecutive monthly win as easing economic concerns triggered a rebound in stocks following a significant selloff earlier this month.

At 16:00 p.m. ET (20:00 GMT), the S&P 500 gained 0.04%, while the NASDAQ Composite climbed 1%. The Dow Jones Industrial Average rose by 228 points, or 0.63%. The S&P 500 finished 2% up for August, marking a strong recovery after its biggest loss in nearly two years on August 5, when a weaker July jobs report heightened recession fears. However, these worries dissipated following a series of positive labor market data.

July Inflation Firms Up Rate-Cut Expectations, But Bigger Cut Bets Fade

The core Personal Consumption Expenditure index, the Fed’s preferred measure of inflation, rose 2.6% in July on an annual basis, slightly lower than the estimated 2.7%. On a monthly basis, it increased by 0.2%.

This data strengthened expectations for the Fed to initiate rate cuts as early as next month. Traders are now pricing in a 68% chance for a 25 basis point cut, but only a 30% chance for a 50 basis point cut, down from 37% last week.

“This reading should provide Chair Powell and the broader FOMC with continued comfort to proceed with rate cuts beginning at September’s meeting,” Macquarie stated in a note.

Company Stock Updates

• Dell (NYSE:DELL) stock rose over 4% after the tech giant raised its annual forecasts following better-than-expected quarterly results bolstered by record AI server revenue.

  Dell reported strong AI revenue, orders, and ISG margins in the quarter. UBS mentioned, “validating that several of the issues last quarter were transitory and not reflective of soft margins across its AI server business.”

• Ulta Beauty (NASDAQ:ULTA) stock fell 4% after it cut its annual sales and profit forecasts, impacted by weakening demand for higher-priced cosmetics and fragrances in its stores.

• Lululemon Athletica (NASDAQ:LULU) adjusted its annual sales and profit forecasts downward due to slowing demand in North America, losing most of its previous gains.

• Intel (NASDAQ:INTC) stock surged over 9% following reports that the tech giant is contemplating splitting off its foundry business and halting plans for new factories amidst a sharp slowdown.

  Wedbush stated that a potential spin-off of Intel’s foundry business could generate immediate value for shareholders, as mounting losses in the sector are impacting Intel’s valuation.

(Peter Nurse, Ambar Warrick contributed to this article.)