Shares of manufacturers and banks pulled the Dow Jones Industrial Average higher Wednesday following new data showing consumer prices rose further last month.
Home Depot , Goldman Sachs and Caterpillar ’s stocks all rose, helping to lift the blue-chip index 170 points in recent trading, putting the Dow on track to notch another record close. The S&P 500 held on to a slimmer gain, rising 0.1%, also putting the index on track for a fresh closing high. Tech stocks lagged behind, meanwhile, bringing the Nasdaq Composite down 0.5%.
Investors gravitated toward stocks that are more closely tied to the economic cycle, such as banks and manufacturers, after new data showed consumer prices rose again last month. However, unlike previous months, the data was largely in line with expectations.
The U.S. consumer-price index gained 5.4% in July from a year earlier, coming in just above analysts’ forecasts of a 5.3% increase. More important, the core rate of inflation, CPI, rose by 0.3%—below the 0.4% increase expected—after excluding energy and food prices.
“For now, the streak of outsized inflation surprises is over,” said Jefferies economists in a note following the data’s release. “However, it remains to be seen whether the period of elevated price pressure is truly over.”
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