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U.S. stocks strengthened today after favorable data on the U.S. economy were released. The Dow Jones Industrial Average, which includes stocks of 30 leading U.S. companies, rose 0.55% to close at a record high of 41,563.08 points. The S&P 500 rose 1.01% to 5,648.40 points, and the Nasdaq Composite Index, which includes many companies in advanced technology industries, rose 1.13% to 17,713.63 points.
All three indexes rose throughout August. They managed to erase the declines that had been caused by fears of a U.S. recession since the beginning of the month. The Dow Jones rose about 1.8% in August. The S&P 500 rose 2.3% and the Nasdaq rose 0.6%, according to Reuters.
The Commerce Department reported that U.S. consumer spending growth accelerated to 0.5% in July from 0.3% in June. The data eased fears of a recession, but also supported foreign exchange market expectations that the Fed would only cut interest rates by 0.25 percentage points in September instead of 0.5 percentage points. The dollar then strengthened slightly as the prospect of a deeper rate cut faded. At around 22:00 CET, the euro was down about 0.2% against the dollar, hovering around $1.1055. Data on falling inflation in the euro zone led to a weakening of the European single currency.
Eurozone inflation slowed to 2.2% in August from 2.6% in July, Eurostat said today. This supports expectations that the European Central Bank (ECB) will cut interest rates further in September. The ECB started cutting interest rates in June, lowering its benchmark rate by 0.25 percentage points to 4.25%. It kept interest rates unchanged in July, but did not rule out a rate cut at its September meeting.
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