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
-
Stock Market Today: Dow Dives 1,679 Points on Trump Tariff Shock
U.S. stocks lost roughly $3.1 trillion in market cap on Thursday – the biggest one-day decline since the start of the COVID-19 pandemic in March 2020.
By Karee Venema Published
-
Did Florida’s Chance at $1,000 in Property Tax Rebates Vanish?
State Taxes The Florida Legislature bypassed Gov. Ron DeSantis’ wish to cut property taxes and instead voted to lower the state’s sales tax.
By Gabriella Cruz-Martínez Published
-
Stock Market Today: Dow Dives 1,679 Points on Trump Tariff Shock
U.S. stocks lost roughly $3.1 trillion in market cap on Thursday – the biggest one-day decline since the start of the COVID-19 pandemic in March 2020.
By Karee Venema Published
-
Wall Street Is Worried About Apple Stock. Should You Be Too?
Analysts expect Trump's sweeping tariffs to have an outsized impact on Apple stock. How concerned should investors be?
By Karee Venema Published
-
The Stock Market Is Selling Off. Here's What Investors Should Do
Investors are fleeing the equities market en masse in response to the Trump administration's "jaw-dropping" tariffs. But the experts say don't panic.
By Karee Venema Last updated
-
How Building Liquidity Into Your Retirement Plan Can Pay Off
To succeed in investing for retirement, you need time and discipline — liquidity can give you both.
By Samantha Compton, IAR Published
-
Striking Oil in Opportunity Zones: Now Might Be the Best Time to Invest
You could unlock hidden wealth in QOZs with strategic oil and gas investments, potentially combining tax advantages with long-term growth in an essential industry.
By Daniel Goodwin Published
-
Stock Market Today: It's the Old Up-Down Again on Liberation Day
Markets look forward to what comes with the reordering of 80-year-old global trade relationships.
By David Dittman Published
-
Can a New Manager Cure Vanguard Health Care Fund?
Vanguard Health Care Fund has assets of $40.5 billion but has been ailing in recent years. With a new manager in charge, what's the prognosis?
By Nellie S. Huang Published
-
What You Don't Know About Annuities Can Hurt You
Lack of awareness leads many to overlook these potent financial tools, and with the possibility of running out of money in retirement, that could really hurt.
By Ken Nuss Published