Market Commentary

Stocks opened higher as the US agreed to delay the October 1st tariff increase to October 15th, which will affect about $250 billion in Chinese imports. The Dow Jones rose 57 points (0.20%) at the open, the S&P 500 gained 3.00%, and the Nasdaq Composite advanced 0.50%. The Dow and S&P 500 entered today’s session less than 1.00% from record highs reached in July. The Dow also closed above 27,000 on Wednesday for the first time since July 30th while the S&P 500 broke above 3,000 for the first time since July 31st. The European Central Bank cut its deposit rate by 10 basis points and established a new bond buying program. The bank will buy €20 billion worth of assets for as long as needed; the Euro dropped 0.20% against the Dollar following the announcement. Gold jumped 1.40% to $1,517.71 an ounce and silver advance to 0.80% to $18.27 per ounce. The yield on 10-Year Treasuries decreased 6 basis points to 1.68%, while the yield on 2-year Treasuries remained virtually unchanged. The US Treasury will offer $40 billion and $50 billion at its weekly auction of 8-week and 4-week bills, respectively.

The US Core Inflation Report reflected the biggest monthly rise in medical-care costs since 2016 and record increases in health-insurance prices. The Medical-Care Index rose 0.70% from the prior month. The report reflected a 1.90% monthly rise and 18.60% annual increase in health-insurance prices, along with increases in hospital services and non-prescription drugs. Also contributing to the core inflation gain were used-car prices, which were up 1.10% for a 3rd straight increase, while new vehicle costs dropped for a second month. Energy prices fell 1.90% from the prior month as gasoline dropped 3.50%. Food prices we unchanged for a third month, while apparel was up 0.20%. A separate report from the Labor Department showed average hourly earnings rose 1.50% in August from a year earlier, following 1.40% in July.