Stocks today: US markets mixed as cooler US inflation data stokes hopes of Fed rate cut

US markets were mixed in early trading on Thursday, a day after the Federal Reserve decided to keep its key interest rate unchanged, just hours after the government said consumer inflation cooled more than expected last month.

Futures for the Dow Jones Industrial Average lost 0.3% before the bell, while futures for the S&P 500 rose just over 0.1%.

Wall Street’s lust for all things artificial intelligence resurfaced after chipmaker Broadcom beat sales and profit targets on the strength of its AI business. Shares in Broadcom rose 14.3% before markets opened on Thursday. Broadcom’s revenue rose 43% over the same quarter last year, and sales of AI-related products and services rose to a record $3.1 billion.

Tesla jumped 6.5% after its CEO Elon Musk said in a post on his social media platform X that early results showed shareholders would vote overwhelmingly to reinstate his $44.9 billion pay package. That stock compensation package was denied by a Delaware judge earlier this year after a group of shareholders sued Musk and the company’s board. Tesla shareholders will also vote on a proposal to move the company’s state of incorporation from Delaware to Texas.

Arcade and restaurant chain Dave & Busters fell more than 10% in pre-market after it reported declining sales and missed Wall Street’s profit targets.

As expected on Wednesday, the Federal Reserve kept its key interest rate steady after its latest policy meeting. And Treasury yields fell after an inflation report showed US consumers paid prices that were 3.3% higher for food, insurance and everything else last month from a year earlier. Economists had expected to see the inflation rate stuck at 3.4%.

Lower inflation helps American households struggling to keep up with rapidly rising prices and also opens the door for the Federal Reserve to cut its key interest rate. Such a move would ease pressure on the economy and give a boost to investment prices.

Fed Chairman Jerome Powell said on Wednesday that US central bank officials need to see more evidence that inflation is tracking closer to its 2% target before it starts cutting rates.

Later on Thursday is the government’s report on wholesale inflation and its weekly report on layoffs.

Elsewhere, stocks fell sharply in Europe as leaders of the Group of Seven major industrialized nations met in Italy in the wake of European Parliament elections that saw a surge in support for the far-right in countries such as France and Germany.

The G7 summit until Saturday is focusing on global conflicts, the spread of artificial intelligence and African issues, with a particular focus on Italy’s long-standing concern about uncontrolled migration to Europe and human traffickers. Also on the agenda were perennial issues such as climate change and China.

France’s CAC 40 was down 1.2% by midday, while Germany’s DAX was down 1.1%. Britain’s FTSE 100 fell 0.4%.

In Asia, investors were turning their attention to a meeting of Japan’s central bank that ends on Friday. The Bank of Japan is not expected to raise its key rate this time, although the economy is under pressure from the dollar’s prolonged rise against the Japanese yen.

Given the recent outcome of Fed tightening, if the BOJ were to stick to its usual accommodative tone on policy settings, it could pave the way for the US dollar’s uptrend against the Japanese yen to continue, Yeap Jun Rong, a market analyst at IG, said in a comment.

In currency trading, the US dollar rose to 157.23 Japanese yen from 156.71 yen. The euro fell to $1.0784 from $1.0812.

Japan’s benchmark Nikkei 225 fell 0.4% to end at 38,720.47. Australia’s S&P/ASX 200 rose 0.4% to 7,749.70. South Korea’s Kospi jumped 1.0% to 2,754.89. Hong Kong’s Hang Seng gained nearly 1.0% to 18,112.63, while the Shanghai Composite fell 0.3% to 3,028.92.

In early energy trading Thursday, U.S. benchmark crude lost 72 cents to $77.78 a barrel. Brent crude, the international benchmark, fell 63 cents to $81.97 a barrel.

On Wednesday, the S&P 500 rose 0.9%, adding to its all-time high the day before. The Nasdaq composite rose 1.5% and the Dow fell 0.1%.

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