Wall Street rebounded and the Dow Jones broke a new record, amid the arrival of bank balance sheets

He Dow Jones reached an all-time high on Friday, ignoring a modest rebound in wholesale inflation As investors digested quarterly results from a number of banks Wall Street.

In this context, the Dow Jones Industrial Average closed at 40,000.90 points, up 0.6%, the S&P 500 stood at 5,615.35 points, gaining 0.6% and the Nasdaq Composite appreciated 0.6%, reaching 18,398.45 points.

JPMorgan Chase, Citi and Wells Fargo kicked off second quarter earnings season

JPMorgan Chase (-1.4%)the largest bank in the United States, reported quarterly results that beat Wall Street estimatesbut were overshadowed by some Disappointing net interest incomea key measure of earnings, for the quarter and provisions for credit losses that exceeded analysts’ estimates.

Wells Fargo cut its outlook for net interest income, sending its shares down more than 5%, while shares of Citigroup Inc. fell 1.5% after reporting its results.

Investors are expecting solid earnings growth from a broad range of companies, which could potentially extend the rally in U.S. stocks beyond the dominant technology sector.

“If analysts’ predictions are accurate, this quarter’s EPS year-over-year growth rate will be the highest since the fourth quarter of 2021,” analysts wrote. Bernstein & Co. in a note.

Wall Street: Investors keep an eye on US producer price index

The Bureau of Labor Statistics, U.S. Department of Labor published the report of the producer price index (PPI) June, which exceeded Wall Street forecasts.

He IPPwhich measures the average change over time in the sales prices received by domestic producers for their output, experienced a 0.2% increase last monthcontrary to the 0.1% increase predicted by economists.

This last figure places the IPP a 2.6% above the same period last year. In particular, the increase in service prices in June helped to offset the fall in goods prices.

In addition, reading the IPP May was revised upwards, showing no change compared to the decline in 0.2% initially reported.

The higher-than-expected PPI data contrasts with recent trends suggesting a decline in inflation. This follows the release of the Consumer Price Index (CPI) for Junewhich was reported on Thursday and was lower than expected.

The CPI, a measure of the average change over time in prices paid by urban consumers for a basket of consumer goods and services, indicated that headline inflation has declined on a monthly basis, with a year-on-year rate of 3%.

Will there be a rate cut??

Market participants are now pricing in a probability of 86% That the Federal Reserve to cut rates in Septemberan increase from the 72% probability seen a week earlier.

USB downgrades Tesla

The actions of Tesla They advanced a 3% on Friday even though UBS Investment Banking downgraded the stock’s rating from Neutral to Sell.

The rating agency acknowledged the positive development in Tesla’s various business areas, but expressed concern about the higher expectations for its core Automotive division (design, development, manufacturing, marketing and sales of cars).

Analysts noted that Tesla It has historically enjoyed a premium valuation due to anticipated growth in several initiatives, particularly in artificial intelligence (AI).

Even though the current market capitalization of Tesla reflects more than $500 billion in value for future developmentanalysts argued that justifying a Buy rating would require even greater growth opportunity.

While acknowledging progress in AI, UBS warned “that investment is expensive, that the pace of improvement could slow, and that the return on investment is likely to be achieved in the distant future. They suggested that waning market enthusiasm for AI could negatively affect Tesla’s stock.”