U.S. stocks opened mixed on Tuesday after June inflation data came in below expectations, with gains in the S&P 500 and Nasdaq offset by surging oil prices and a steep drop in International Business Machines stock.
The S&P 500 rose 0.3%, while the Nasdaq gained 0.6%
The Dow Jones Industrial Average slipped roughly 0.2%. June’s consumer price index dropped 0.4% from the prior month, holding the year-over-year rate at 3.5% — below the 0.2% monthly decline and 3.8% annual rate that Dow Jones-surveyed economists had anticipated. After the report, CME FedWatch data showed the probability of a Fed rate hike at the July meeting retreating to roughly 16%-17%, down sharply from 42% the day before, though a September increase remained the base case for many traders at around 63%.
Federal Reserve Chair Kevin Warsh is scheduled to testify before Congress Tuesday, where he plans to pledge to bring inflation under control, according to The Wall Street Journal. IBM was among the session’s biggest losers, with shares cratering roughly 22%-24% after management cautioned that a slowdown in its software and infrastructure segments would leave second-quarter earnings below Wall Street’s targets. Oil built on Monday’s surge, pushing U.S. crude past $80 a barrel while Brent futures climbed roughly 3% to clear $86.