Dow Buoyant As Cooling Inflation Raises Hopes Of Second Rate Pause; Meta Gains On Analyst Upgrade

The Dow Jones Industrial Average will rise for the fourth consecutive session, as new inflation figures show that prices are cooling. Blue chip index rose 0.3% by 10:30 am ET. ET.

The S&P 500 was up by 0.5%, while the Nasdaq rose by 0.8%.

After a 0.4% drop in May, the Producer Price Index increased by 0.1% in June. PPI increased 0.1% on an annual basis. This was also lower than forecasts. The consumer price index for June increased by 0.2%, which is lower than the 0.3% forecast.

CME FedWatch Tool predicts a 82.2% probability of rates remaining unchanged after a hike of 25 basis points expected in July. August is a month without a Fed meeting.

Initial claims for unemployment fell from 248,000 to 237,000 in the previous week.

Nasdaq Rebalancing

The Nasdaq index will trim the top holdings if they account for more weight than 4.5%. SEC rules demand a rebalancing when they collectively exceed 48% of the total weight in an index. Apple (AAPL), Microsoft(MSFT)and Tesla (TSLA)are among the heavyweights who will have less impact.

Wells Fargo analysts believe that Starbucks (SBUX), Mondelez, Booking Holdings and Intuitive Surgical may be among the stocks to enter the Nasdaq 100.

The changes will be announced on Friday, and they will go into effect before the opening of the market on July 24, 2018. In its history, the Nasdaq has already rebalanced itself twice: in 1998 and 2011.

Volumes on the NYSE & Nasdaq were lower than the same time Wednesday.

The Russell 2000 small-cap index rose by 0.8%, while the Innovator 50 ETF (FFTY), which outperformed all other funds with a gain of 1%, was also up.

Crude oil increased to $76.42 per barrel. The yield on benchmark 10-year Treasury notes fell by 5 basis points, to 3.81%.

Dow Jones Stocks

Apple and Microsoft, the Dow leaders, rose in early trading. Both stocks are near their all-time highs. Microsoft offers an early trendline at the hour.

Walt Disney (DIS), after erasing its early losses, was almost flat. The entertainment company announced late Wednesday that CEO Bob Iger would continue in his role until 2026.

Stocks moving today

IBD 50 stock On Holding is breaking out from a cup handle at a buy point of 33.67. The volume is about three times the average, which is bullish. The relative strength line, however, is not keeping up.

Exxon Mobil shares (XOM), which are owned by the oil giant, fell on news that it will purchase Denbury (DEN) at a price of $4.9 billion. Exxon Mobile's shares are working on a cup-base and testing the 50 day line.

After a report that showed earnings were higher than expected, PepsiCo shares (PEP), although still up, pared their gains.

Delta Air Lines lost all its gains in the airline sector after a stellar second quarter performance. Fastenal's (FAST), which reported its second-quarter earnings, fell. The volume is high, but shares have trimmed their losses to just 1.6%. Fastenal is still in the buy range at a buy point of 55.34.

Aehr (AEHR), after the close of the market, rose in advance of its earnings. According to IBD MarketSmith, shares are close to a 40.69 entry on a cup with no handle.

UnitedHealth, the Dow Jones leader (UNH), will be reporting on Friday. Also reporting are big banks JPMorgan Chase(JPM), Citigroup(C), and Wells Fargo.

Meta Platforms (META), a company that has seen huge gains, added to those gains when TD Cowen upgraded it to "outperform". The analysts set a new target price of 345 which is higher than their previous target price of 220.