US stocks rally as cooling producer inflation boosts rate-cut hopes By Investing.com

Investing.com — U.S. stocks rallied Tuesday as further signs that inflation is cooling strengthened the case for a Federal Reserve rate cut as soon as next month, pushing tech stocks to add to recent gains.

At 13:09 ET (17:09 GMT), the rose 316 points, or 0.8%, the gained 1.5%, and climbed 2.3%.

PPI inflation cooled in July as CPI looms

Data released earlier Tuesday showed the rose 0.1% on a monthly basis in July, compared with the 0.2% rise expected by economists. Annually, it rose to 2.2%, versus an estimate of a 2.3%.

Excluding volatile food and energy components, was flat on the month, compared to an expected 0.2% rise. Annually, the narrower measure of PPI stood at 2.4%, versus an estimated 2.7% advance.

“A cooler-than-expected PPI report offers welcome support for those in favor of a near-term rate reduction,” Stifel said in a recent note just a day head of fresh inflation data with the release of the . 

Home Depot slumps on guidance cut, Starbucks (NASDAQ:) jumps after ousting CEO 

Home Depot (NYSE:) stock fell over 1% after the retailer lowered its full-year outlook, citing weaker consumer demand for home improvement projects.

Strong consumer spending has mostly underpinned U.S. inflation this year, despite pressure from high interest rates.

Chipotle Mexican Grill Inc (NYSE:) fell 10% after Chipotle chief executive Brian Niccol was tapped by Starbucks to become its new CEO starting Sept. 9, replacing Laxman Narasimhan, who was laid off with immediate effect.

Starbucks, which has been the target of activist investors pushing for change at the coffee chain, jumped 20%  on the day. Some on Wall Street remain unconvinced, noting that Chipotle had never embraced menu innovation or marketing at any kind. 

“The challenge [for Starbucks] is to connect with a new customer,” Wedbush said in a note. “Aside from the power to change the direction of macro headwinds, we view the shareholder euphoria (as expressed in the share price this morning) as premature.”

Dell Technologies (NYSE:) jumped 6% after Barclays upgraded the stock to equalweight from underweight, following the tech company’s recent pullback. 

(Peter Nurse, Ambar Warrick contributed to this article.)