Stock Market Today: Dow Gains 242 Points After Encouraging CPI Data
The Nasdaq Composite ended flat, though, as Alphabet sold off on more regulatory woes.


Joey Solitro
Stocks were choppy Wednesday even as the latest inflation data all but solidified expectations the Federal Reserve will start cutting interest rates at its next meeting in September. The main question now is how large that rate cut will be.
According to CME Group's FedWatch Tool, futures traders are pricing in a 65% chance the central bank will lower the federal funds rate by a quarter-percentage point next month, up from yesterday's 47% probability. The odds of a 50 basis-point cut (0.50%) fell to 35% from Tuesday's 53%.
The revised outlooks follow this morning's release of the Consumer Price Index (CPI), which increased 0.2% in July vs the prior month. Year-over-year, headline CPI was up 2.9%, the smallest annual increase since early 2021.

Sign up for Kiplinger’s Free E-Newsletters
Profit and prosper with the best of expert advice on investing, taxes, retirement, personal finance and more - straight to your e-mail.
Profit and prosper with the best of expert advice - straight to your e-mail.
Core CPI, which excludes volatile food and energy prices, was up 0.2% month-over-month and 3.2% year-over-year in July – also the slowest pace of annual growth in three years.
"Market participants are confounded following this morning's CPI report, which produced a morning reversal in equities and fixed income after yesterday's strong gains," says José Torres, senior economist at Interactive Brokers. "On the one hand, inflationary pressures are well contained near 3%, but on the other, shelter costs accelerated fiercely due to lighter mortgage rates and an underbuilt housing market."
As a result, the Nasdaq Composite pared most of an early lead to end the day up just 0.03% at 17,192. Meanwhile, the S&P 500 (+0.4% at 5,455) and the Dow Jones Industrial Average (+0.6% at 40,008) finished with more notable gains.
Kellanova stock pops on $36 billion buyout buzz
In single-stock news, Kellanova (K) shares jumped 7.8% after Mars confirmed it will buy the Pringles parent in an all-cash deal valued at nearly $36 billion, including debt. The bid from the privately held candy and pet food maker works out to $83.50 per Kellanova share, or a 12% premium to last night's close.
The deal "speaks to Mars' snacking ambitions," says Jefferies analyst Rob Dickerson, who has a Hold rating on Kellanova. "Mars has stated previously that doubling its snacking business is a goal over the next decade. By our math, a K acquisition would increase Mars' global and U.S. snacking businesses by roughly 40% and 60%, respectively."
Alphabet drops on more DOJ woes
Elsewhere, Alphabet (GOOGL) fell 2.3% after a Bloomberg report indicated the Justice Department is considering breaking up the company's Google division. This follows last week's court ruling that found Google has illegally maintained a monopoly in search and text advertising.
While any process of splitting up Google faces a long road in the legal system, Needham analyst Laura Martin (Buy) supports the move. "We believe that GOOGL is worth more in pieces than together, so we welcome regulators' attempts to break up GOOGL," she writes in a note to clients.
Southwest gears up for proxy fight
Meanwhile, Southwest Airlines (LUV) stock slipped 0.2% after a report in The Wall Street Journal suggested activist investor Elliott Investment Management is readying a proxy battle with the discount airline. Elliott plans to call for a special meeting and nominate 10 directors to Southwest's 15-member board.
"Although Elliott is likely able to convene a special meeting of the LUV board of Directors, we are doubtful that the 10 proposed (still unconfirmed) board members would be supported by the current shareholder base," said Jefferies analyst Sheila Kahyaoglu (Underperform, the equivalent of Sell). The analyst doesn't believe investors will vote out current leadership with a "go-forward plan" in place.
Related content
- The Fed Is About to Cut Rates. What Should Investors Do?
- Brinker International Stock Sinks as Higher Costs Eat Into Earnings
- Earnings Calendar and Analysis for This Week
Get Kiplinger Today newsletter — free
Profit and prosper with the best of Kiplinger's advice on investing, taxes, retirement, personal finance and much more. Delivered daily. Enter your email in the box and click Sign Me Up.
With over a decade of experience writing about the stock market, Karee Venema is the senior investing editor at Kiplinger.com. She joined the publication in April 2021 after 10 years of working as an investing writer and columnist at a local investment research firm. In her previous role, Karee focused primarily on options trading, as well as technical, fundamental and sentiment analysis.
- Joey SolitroContributor
-
Are You a Retirement Millionaire Too Scared To Spend?
If you are too scared to spend money in retirement, you may be saddled with regret. Here are three ways to safely enjoy your sizable retirement nest egg.
By Donna Fuscaldo Published
-
U.S. Treasury to Eliminate Paper Checks: What It Means for Tax Refunds, Social Security
Treasury President Trump signed an executive order forcing the federal government to phase out paper check disbursements by the fall.
By Gabriella Cruz-Martínez Published
-
Seven Questions to Ask When Evaluating Personal Loan Options
Taking out a personal loan too hastily could lock you into unfavorable terms with an untrustworthy lender. Ask these questions before signing anything.
By David Kimball Published
-
How Much Does Being Rich Matter in Retirement?
After a certain point, having more money in retirement won't make you any happier, new research shows. Instead, physical health, a sense of purpose, and a minimal amount of non-mortgage debt are more relevant.
By Christy Bieber Published
-
The Three Biggest Fears Keeping Retirees Up at Night
Here are the steps you can take to put those fears to rest and retire with confidence so you can relax and enjoy the life you've planned.
By Pam Krueger Published
-
What Can a Donor-Advised Fund Do for You? (A Lot)
DAFs and private foundations go about helping charities (and those who donate) in different ways. Each comes with its own benefits and restrictions to navigate.
By Julia Chu Published
-
Estate Planning When You Have International Assets
Estate planning gets tricky when you have assets and/or beneficiaries outside the U.S. To avoid costly inheritance mistakes, it pays to understand the basics.
By Kelsey M. Simasko, Esq. Published
-
Microsoft Stock: Innovation Spurs Its 100,000% Return
Microsoft's ability to recognize the "next big thing" has allowed sales – and its share price – to grow exponentially over the years.
By Louis Navellier Published
-
Three Essential Estate Planning Steps to Protect Your Nest Egg
After dedicating years to building your wealth and securing your future, make sure your assets are protected and your loved ones are provided for in the future.
By Nicole Farbo, CFP® Published
-
Is Chasing the American Dream Ruining Your Financial Life?
Too many people focus on visible affluence as a marker of success. Here's how to avoid succumbing to the pressure and driving yourself into debt.
By Anthony Martin Published