Joey Solitro
A solid week for stocks ended on a comparatively quiet note as investors took in another encouraging reading on inflation. With the pace of rising prices seemingly under control, the focus now shifts to the labor market and next Friday's release of the September jobs report.
Today, though, it was an inflation update that Wall Street was centered on. According to the Bureau of Economic Analysis, the Personal Consumption and Expenditures (PCE) Price Index increased by 0.1% in August from the month prior and was up 2.2% on an annual basis. Both figures were lower than what was seen in July.
Core PCE, which excludes volatile food and energy prices, increased 0.1% month over month and 2.7% year over year. While the monthly rise was slower than July's 0.2% gain, the annual increase was slightly faster.
From just $107.88 $24.99 for Kiplinger Personal Finance
Be a smarter, better informed investor.
Sign up for Kiplinger’s Free 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.
"The August PCE report supports the Fed's decision to go big on September 18, although the core year over year at 2.7% suggests that another round of 50 basis points needs to come under careful scrutiny unless the labor market suggests weakness," says Quincy Krosby, chief global strategist at LPL Financial.
Krosby adds that while the Fed "cannot declare complete victory on inflation," today's PCE data "underscores that overall inflation continues to move decisively in the right direction."
Costco falls after revenue miss
In single-stock news, Costco Wholesale (COST) stock fell 1.8% after the membership warehouse club's fiscal fourth-quarter revenue fell short of estimates. Still, the company beat on the bottom line.
"We look very favorably upon COST's long-term prospects," says Oppenheimer analyst Rupesh Parikh (Outperform, the equivalent of Buy). Among the many reasons he's bullish on the consumer staples stock are Costco's unique and improving consumer value proposition, open-ended worldwide growth prospects, and its leading competitive position that could drive share gains.
The analyst recommends clients "take advantage" of any post-earnings profit-taking on COST.
Super Micro bounces ahead of stock split
Elsewhere, Super Micro Computer (SMCI) stock rose 4.3% ahead of next week's 10-for-1 stock split. While stock splits are the equivalent of making change – 10 one-dollar bills for one $10 bill, for instance – it will bring SMCI's share price down to about $42 from its current perch near $420.
Shares have shed 65% since their mid-March peak, but Needham analyst Quinn Bolton remains bullish on the tech stock. "We view Super Micro as a significant beneficiary from growing investment in AI infrastructure and forecast a revenue compound annual growth rate (CAGR) in excess of 55% from fiscal 2021 to fiscal 2026," he wrote in a recent note.
Alibaba headed toward its best month in nearly two years
One of the most notable movers today was Alibaba Group Holding (BABA) stock, which added 2.2%. This extends the e-commerce giant's impressive September rally, with shares up 28.7% for the month to date, and puts BABA on pace for its best one-month return since December 2022 (+33.8%).
BABA was buoyed earlier this month by news it released open-source artificial intelligence (AI) models, while recently announced stimulus measures from the People's Bank of China also created tailwinds.
As for the main indexes, the Dow Jones Industrial Average gained 0.3% to 42,313 – a new record closing high – on strength in oil major Chevron (CVX, +2.5%) and insurance giant UnitedHealth Group (UNH, +1.2%). The S&P 500 slipped 0.1% to 5,738, while the Nasdaq Composite fell 0.4% to 18,119.
Related content
- Is Investing In Gold Worth It? How Gold Prices Have Changed
- What Is the Rule of 72 and How Is It Used in Investing?
- How to Spot a Bubble in Stocks
-
Alphabet Stock Pops After Google Antitrust Ruling: What to KnowGOOGL stock is soaring Wednesday after a judge ruled that Alphabet does not have to divest its Chrome browser.
-
7 Mistakes to Avoid When You First Start InvestingInvesting brings the opportunity to build wealth, but there are plenty of mistakes that can be made. Here are seven common ones and how they can be avoided.
-
Alphabet Stock Pops After Google Antitrust Ruling: What to Know
GOOGL stock is soaring Wednesday after a judge ruled that Alphabet does not have to divest its Chrome browser.
-
7 Mistakes to Avoid When You First Start Investing
Investing brings the opportunity to build wealth, but there are plenty of mistakes that can be made. Here are seven common ones and how they can be avoided.
-
A Fidelity Fund Misses Out on Soaring Bank StocksThe Fidelity International Growth Fund has outperformed over the long term, but its lagging exposure to bank stocks has weighed on more recent returns.
-
More Than Money: The Hidden Toll of Financial Abuse of Older AdultsFinancial abuse from schemes involving tech support, government impostors, false sweepstakes, grandchild hoaxes and online shopping issues can cause thousands of dollars in losses.
-
I'm a Financial Planner: Here Are Three High-Impact Ways to Make a Difference With Your DollarsThe world often feels out of control, but here are three ways to use your money — through investments, charitable giving and political donations — to help create a more just and sustainable future.
-
Stocks Slide to Start September: Stock Market TodaySeasonal trends suggest tough times for the stock market as we round into the end of the third quarter.
-
If You'd Put $1,000 Into Sherwin-Williams Stock 20 Years Ago, Here's What You'd Have TodaySherwin-Williams stock has clobbered the broader market by a wide margin for a long time.
-
Where is the Foreign Dividend Boom Headed?It's been a golden six months for foreign dividend stocks, but can any be relied on for predictable income going forward? Here are some options.
