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Key Takeaways
Major U.S. equities indexes jumped higher after the latest Producer Price Index (PPI) data showed a lower-than-expected uptick in wholesale prices during July.
The most recent indicator of cooling inflation bolstered expectations that the Federal Reserve would cut its influential interest at its meeting next month. The soft PPI print came a day ahead of the July Consumer Price Index (CPI) report, which will also be under the microscope for signals inflation has moderated enough to justify lowering rates.
The S&P 500 was up 1.7% on Tuesday. Outperformance from the technology sector helped the Nasdaq soar 2.4%, while the Dow closed with gains of 1.0%.
Starbucks ( SBUX ) shares notched the top performance in the S&P 500, steaming 24.5% higher after the coffee giant said it hired Brian Niccol as its new chief executive officer (CEO) . The executive shakeup came amid pressure from activist investors Elliott Investment Management and Starboard Value. The two have reportedly acquired positions in Starbucks and lobbied for leadership changes.
Niccol will take the helm at Starbucks after leaving the CEO role at Chipotle Mexican Grill ( CMG ) at the end of August. Chipotle said Scott Boatwright, its current chief operating officer (COO) , will step in as interim CEO following Niccol's departure. However, the markets did not react as favorably to the burrito maker's C-suite lineup adjustments. Chipotle shares fell 7.5% on the day, posting the steepest drop of any S&P 500 stock.
Shares of Estee Lauder ( EL ) advanced 6.6% ahead of the makeup maker's upcoming earnings report, set for release next Monday. Analysts expect the cosmetics company to post year-over-year revenue and earnings per share (EPS) growth for its fiscal fourth quarter. Tuesday's gains came as analysts at Citi reiterated their "buy" rating and price target on Estee Lauder stock, following a survey of investors' expectations and the collection of data from the company's cosmetics industry peers.
Nvidia (
NVDA
) shares added 6.5% on Tuesday, extending gains posted in the previous session. The rise comes amid reports that delays to the chipmaker's Blackwell artificial intelligence (AI) processor may be less significant than previously anticipated. Estimates earlier in August warned that the launch of the next-generation semiconductors could be pushed back by as much as three months, but UBS analysts wrote in a note to clients this week that the highly anticipated processors may be only four to six weeks behind schedule.
Shares of Baxter International ( BAX ) slipped 6.6% after the medical technology company said it would sell its kidney treatment division to private equity firm The Carlyle Group ( CG ). Carlyle will pay $3.8 billion in cash for the unit, which will be named Vantive following the transaction. Carlyle shares added 2.4% following the announcement.
Crude oil prices moved lower as the International Energy Agency (IEA)
trimmed its oil demand forecast
for 2025, pointing to slower economic growth in China. The lower commodity prices pressured oil and gas stocks. Shares of Valero Energy (
VLO
), Occidental Petroleum (
OXY
), and Diamondback Energy (
FANG
) were all down around 2.6%.
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