As the stock market closed, the broad S&P 500 had risen by 0.4% to 5,455, with the index up 0.2% from the Stockholm Stock Exchange closing. The Dow Jones Industrial Average added 0.6% to 40,008, while the tech-heavy Nasdaq Composite remained unchanged at 17,193.
In the US, consumer prices rose by 0.2% in July compared to the previous month. Year-over-year, the Consumer Price Index (CPI) increased by 2.9% compared to the same month last year.
Analysts had expected the CPI to rise by 0.2% compared to the previous month and by 3.0% compared to the same month last year, according to Trading Economics’ consensus forecast among analysts.
Among individual companies, Alphabet’s stock fell by 2.3% following reports that US regulators are considering breaking up the tech giant. According to Bloomberg, the units most likely to be divested are Google’s Chrome browser and Android operating system if the Department of Justice pushes for a breakup.
Meanwhile, looking at the “Magnificent 7” stocks, Apple and Microsoft rose by 0.2% and 0.7%, respectively. Amazon, Meta Platforms, and Tesla performed worse, declining by 0.1%, 0.3%, and 3.1%, respectively.
Victoria’s Secret surged by 16% as the lingerie brand announced the appointment of Hillary Super, former CEO of music artist Rihanna’s Savage X Fenty lingerie brand, as the new CEO starting in September. Additionally, Victoria’s Secret reported preliminary second-quarter results that exceeded analysts’ expectations.
On the other hand, café chain Starbucks weakened by 2.1% after a 25% surge in stock price on Tuesday. The significant increase was due to Chipotle’s CEO Brian Niccol replacing Starbucks’ current CEO Laxman Narasimhan.
Furthermore, food conglomerate Kellanova climbed by 7.7% as chocolate giant Mars acquired the company for $83.50 per share in cash. This deal values Kellanova at approximately $36 billion, with the transaction expected to be completed in the first half of 2025. Kellanova owns several well-established brands, including Pringles, Pop-Tarts, and Special K.
Lastly, betting company Flutter advanced by 7.9% following its second-quarter earnings report, which showed revenues above consensus expectations.
Analysis:
Overall, the stock market saw mixed performance with some major indices and individual stocks experiencing gains while others faced declines. The increase in consumer prices in the US could have implications for inflation and interest rates, impacting investment decisions. The potential breakup of Alphabet and changes in leadership at companies like Victoria’s Secret and Starbucks could influence their future performance. Additionally, acquisitions like Mars’ purchase of Kellanova highlight ongoing consolidation trends in the food industry. Investors should stay informed about these developments to make well-informed decisions about their portfolios.