Stocks pushed higher on Wednesday after dropping a day earlier, with a surge in oil prices helping fuel a risk-on move in markets. The move higher came following a drop earlier during the session as new tepid economic data out of China added to concerns over the pace of global growth.
The S&P 500 gained intraday, led by the energy and industrials sectors. The Dow also jumped, steadying after the index shed nearly 300 points on Tuesday, resuming declines and falling for the sixth time in seven sessions. U.S. crude oil prices futures jumped to their highest level since early August after new data showed crude oil inventories slid last week amid production disruptions in the wake of Hurricane Ida.
Key economic data out of China pointed to a much sharper-than-expected deceleration in growth last month, suggesting the recovery in the world's second-largest economy was losing steam at a faster rate than expected. And elsewhere, shares of casino operators with locations in Macau, like Wynn Resorts (WYNN) and Las Vegas Sands (LVS), slid after the government announced plans to increase regulatory oversight of the gambling industry.
China's retail sales grew just 2.5% in August over last year, coming in well below the 7.0% expected, according to Bloomberg consensus data, and slowing sharply from the 8.5% pace posted in July. Industrial production also pulled back for the manufacturing-heavy country, with this rising 5.3% compared to 6.4% in July. The disappointing prints sent shares of Chinese stocks like Alibaba (BABA), Pinduoduo (PDD) and JD.com (JD) lower.
Recent data for the U.S. has also pointed to decelerating growth and some cooling in price pressures.
The Labor Department's consumer price index (CPI), excluding volatile food and energy prices, ticked up by just 0.1% in August compared to July, posting its slowest monthly gain since February. Core CPI also rose less than expected over last year, the latest report released Tuesday showed.
However, the big contributors to the drop were declines in prices for things like airfare and hotel room rates, which were likely only temporarily pushed down due to renewed concerns over the Delta variant. Still, the slower-than-expected rise in consumer prices helps vindicate some Federal Reserve policymakers' views that inflation will ultimately prove transitory, and offers more room for officials to keep current monetary policies in place for longer, some pundits said.
"We probably won't get the answer to whether it's transitory or not probably until 2022 – that's when the base effects will start to wash out and all the distortions start to kind of resolve themselves," Sameer Samana, Wells Fargo Investment Institute senior global market strategist, told Yahoo Finance on Tuesday.
"What the number today tells us is that the Fed probably has a little more wiggle room," he added. "If they don't want to do something at the meeting next week, given the weaker-than-expected [August] payrolls number, the inflation number today, also takes the pressure off of them to do something next week."
Still, investors continue to appraise a host of risks to the economic and equity outlook, with price pressures serving as only concern. And with U.S. equities still relatively close to all-time highs and the S&P 500 still up by more than 18% so far this year, jitters over the fundamental backdrop have only been intensifying.
"I do think we’re going to see a bit of an air pocket in concern from some of the companies going into year-end,” Chris Retzler, Needham small cap growth fund portfolio manager, told Yahoo Finance. “Supply chains are still certainly stretched. Semiconductors are a problem across almost every industry, and labor costs continue to be a problem. But looking a year out, I would think that those problems begin to abate, and that's good for long-term investors."
4:03 p.m. ET: Stocks end higher: Dow adds 237 points, or 0.7%, as energy stocks outperform
Here were the main moves in markets as of 4:03 p.m. ET:
S&P 500 (^GSPC): +37.68 (+0.85%) to 4,480.73
Dow (^DJI): +236.82 (+0.68%) to 34,814.39
Nasdaq (^IXIC): +123.77 (+0.82%) to 15,161.53
Crude (CL=F): +$2.23 (+3.16%) to $72.69 a barrel
Gold (GC=F): -$12.00 (-0.66%) to $1,795.10 per ounce
10-year Treasury (^TNX): +2.7 bps to yield 1.3040%
2:45 p.m. ET: U.S. oil prices post highest settlement since late July
U.S. West Texas intermediate crude oil futures settled higher by 3% to reach $72.61 per barrel, representing the commodity's highest settlement since the end of July.
The move higher came alongside an apparent drop in supply, after the U.S. Energy Information Administration reported Wednesday morning that crude oil inventories declined by 6.4 million barrels last week. That marked the lowest level since mid-2019.
Brent crude also held onto earlier gains and settled above $75 per barrel.
10:08 a.m. ET: Oil prices jump, Brent crude tops $75 per barrel for the first time in over a month
U.S. and Brent crude oil futures jumped on Wednesday as supply issues pushed energy prices higher and at least temporarily outweighed concerns over the Delta variant's impact on mobility.
West Texas intermediate crude oil futures jumped by 3% to trade near $73 per barrel, extending a recent run-up spurred after Hurricane Ida impacted domestic production and supply. Brent crude, the global standard, jumped by nearly the same margin to top $75 per barrel during the session, reaching its highest level since the beginning of August.
9:52 a.m. ET: U.S. manufacturing production slowed more than expected in August
U.S. manufacturing production decelerated sharply in August after posting a strong monthly gain in July, reflecting impacts from Hurricane Ida and ongoing supply chain disruptions.
The Federal Reserve's latest data showed manufacturing production rose by just 0.2% in August, or half the gain expected, based on Bloomberg consensus data. Production had risen by 1.6% in July.
A broader measure of industrial production also decreased in August, Fed data additionally showed. Industrial production increased 0.4% in August compared to July, slowing from the prior month's 0.8% gain.
9:31 a.m. ET: Stocks open higher
Here's where markets were trading Wednesday morning just after the opening bell:
S&P 500 (^GSPC): +6.84 points (+0.15%) to 4,449.89
Dow (^DJI): -4.97 points (-0.01%) to 34,572.60
Nasdaq (^IXIC): +38.81 points (+0.24%) to 15,073.73
Crude (CL=F): +$1.82 (+2.58%) to $72.28 a barrel
Gold (GC=F): -$8.70 (-0.48%) to $1,798.40 per ounce
10-year Treasury (^TNX): +0.3 bps to yield 1.282%
8:45 a.m. ET: Empire State Manufacturing Index unexpectedly surged in September as orders, shipments picked up
The Empire State Manufacturing Index posted a surprise jump in September as activity in the New York region's goods-producing sector improved more than expected.
The headline index of business conditions jumped to 34.3 in September from 18.3 in August. Consensus economists were looking for the index to drop to 17.9, according to Bloomberg consensus data.
The strong print came as new orders, shipments and unfilled orders each improved markedly, and labor market indices also strengthened. Still, an index tracking delivery times rose to a record high, suggesting supply chain disruptions remained the inhibiting factor on growth while demand was high. Overall, assessments of future and present conditions held up strongly, and 46% of survey respondents said conditions improved over the month, compared to just 12% that said conditions had worsened.
7:26 a.m. ET Wednesday: Stock futures trade mixed
Here's where markets were trading as of Wednesday morning:
S&P 500 futures (ES=F): +5 points (+0.11%) at 4,449.50
Dow futures (YM=F): +4 points (+0.01%) to 34,587.00
Nasdaq futures (NQ=F): +31.5 points (+0.2%) to 15,418.50
Crude (CL=F): +$0.97 (+1.38%) to $71.43 a barrel
Gold (GC=F): -$3.20 (-0.18%) to $1,803.90 per ounce
10-year Treasury (^TNX): -0.9 bps to yield 1.27%
6:10 p.m. ET Tuesday: Stock futures tick up
Here were the main moves in markets as of Tuesday evening:
S&P 500 futures (ES=F): +4 points (+0.09%) at 4,448.50
Dow futures (YM=F): +21 points (+0.06%) to 34,604.00
Nasdaq futures (NQ=F): +15 points (+0.1%) to 15,402.00
Emily McCormick is a reporter for Yahoo Finance. Follow her on Twitter: @emily_mcck