NEW YORK (AP) — U.S. stocks rallied Tuesday to one of their best days of the year after the first of several highly anticipated reports on the economy this week came in better than expected.
The S&P 500 jumped 1.7% for its third-best day of 2024 after the U.S. government reported inflation at the wholesale level slowed last month by more than economists expected. The Dow Jones Industrial Average rose 408 points, or 1%, and the Nasdaq composite clambered 2.3% higher.
High inflation has been the scourge of shoppers and financial markets for years. It finally looks to be slowing enough to get the Federal Reserve to ease up on high interest rates, which the Fed has been keeping at economy-crunching levels in order to stifle inflation.
Treasury yields eased in the bond market following the inflation data, as traders remain convinced the Fed’s meeting next month will bring the first cut to interest rates since the COVID crash of 2020. The yield on the 10-year Treasury fell to 3.84% from 3.91% late Monday.
All is not clear, though. On Wednesday, the U.S. government will deliver the latest monthly update on inflation that U.S. consumers are feeling, which could be less encouraging. And on Thursday will come a report showing how much U.S. shoppers are spending at retailers.
A growing worry on Wall Street is that the Fed may have kept interest rates too high for too long and undercut the U.S. economy by making it so expensive to borrow money. The economy is still growing, and many economists don’t expect a recession, but a sharp slowdown in U.S. hiring last month raised questions about its strength.
Such questions weigh because even cuts to interest rates haven't been enough for stocks to rise significantly in the ensuing 18 months if a recession hits, according to Chris Haverland, global equity strategist at Wells Fargo Investment Institute.
Home Depot on Tuesday delivered stronger profit for the spring quarter than analysts expected, but it also said high interest rates and uncertainty about the economy are keeping some customers from spending on home improvement projects.
The retail giant lowered its full-year forecasts for an important measure of sales and for profit, even though it topped expectations for the second quarter. Its stock rose 1.2% after flipping earlier between modest gains and losses.
Elsewhere on Wall Street, Starbucks soared 24.5% after it convinced Brian Niccol to leave his job as CEO of Chipotle Mexican Grill to take over the coffee chain. He will start as chairman and chief executive next month and will replace Laxman Narasimhan, who is stepping down immediately.
Chipotle, meanwhile, dropped 7.5%. Niccol has been its chief executive since 2018 and its chairman since 2020, and he helped its stock rise more than 240% for the five years through Monday. That tower’s over the S&P 500’s 96% return including dividends. Chipotle said its chief operating officer, Scott Boatwright, would be its interim CEO.
In stock markets abroad, indexes were modestly higher across much of Europe and Asia. Japan’s Nikkei 225 was an outlier and jumped 3.4%.
Japan’s market has been viciously volatile recently, including the worst drop for the Nikkei 225 since the Black Monday crash of 1987. It’s been swinging since a hike to interest rates by the Bank of Japan forced many hedge funds and other investors to abandon a popular trade all at once, where they had borrowed Japanese yen at cheap rates to invest elsewhere. The forced selling that followed the surge in the Japanese yen’s value reverberated around the world.
But a promise last week by a top Bank of Japan official not to raise rates further as long as markets are “unstable” has helped calm the market.
Another worry that’s made Wall Street so shaky the last month is concerns that investors went overboard in their mania around artificial-intelligence technology and took the prices of Big Tech and AI-related stocks too high.
Nvidia, the company whose chips are powering much of the move into AI, has been at the center of the action. After soaring more than 170% through the year’s first six and a half months, it plunged more than 20% over the ensuing three weeks.
On Tuesday, Nvidia rose 6.5% and was the strongest force pushing upward on the S&P 500. All the other stocks in the small group known as the “Magnificent Seven” also climbed. They almost singlehandedly pushed the S&P 500 to dozens of all-time highs earlier this year, even as high interest rates weighed on much of the rest of the stock market.
Unlike much of the early part of this year, it wasn’t just the Magnificent Seven rising Tuesday. Wall Street’s rally was more widespread, and nearly 85% of the stocks in the S&P 500 rose. The smaller stocks in the Russell 2000 index also climbed 1.6%.
All told, the S&P 500 rose 90.04 points to 5,434.43. The Dow added 408.63 to 39,765.64, and the Nasdaq composite gained 407.00 to 17,187.61.
AP Business Writer Yuri Kageyama contributed.
The New York Stock Exchange is shown on Tuesday, Aug. 13, 2024, in New York. (AP Photo/Peter Morgan)
A currency trader passes by a screen showing the Korea Composite Stock Price Index (KOSPI), top left, and the foreign exchange rate between U.S. dollar and South Korean won, top center, at the foreign exchange dealing room of the KEB Hana Bank headquarters in Seoul, South Korea, Tuesday, Aug. 13, 2024. (AP Photo/Ahn Young-joon)
A currency trader watches monitors near a screen showing the Korea Composite Stock Price Index (KOSPI), top left, and the foreign exchange rate between U.S. dollar and South Korean won, top center, at the foreign exchange dealing room of the KEB Hana Bank headquarters in Seoul, South Korea, Tuesday, Aug. 13, 2024. (AP Photo/Ahn Young-joon)
Currency traders pass by a screen showing the Korea Composite Stock Price Index (KOSPI), top left, and the foreign exchange rate between U.S. dollar and South Korean won at the foreign exchange dealing room of the KEB Hana Bank headquarters in Seoul, South Korea, Tuesday, Aug. 13, 2024. (AP Photo/Ahn Young-joon)
RAMALLAH, West Bank (AP) — The Israeli military said Tuesday an American activist killed in the West Bank last week was likely shot “indirectly and unintentionally” by its soldiers, drawing a strong rebuke from U.S. Secretary of State Antony Blinken and the activist's family.
Israel said a criminal investigation has been launched into the killing of Aysenur Ezgi Eygi, a 26-year-old activist from Seattle who was taking part in a demonstration against settlements in the Palestinian territory. Doctors who treated Eygi, who also held Turkish citizenship, said she was shot in the head.
Blinken condemned the fatal shooting when asked about it at a news conference in London, and said the U.S. would make clear to its ally that such actions are “not acceptable.”
“No one — no one — should be shot and killed for attending a protest,” he said. “Israeli security forces need to make some fundamental changes in the way they operate in the West Bank.”
Eygi's family in the U.S. released a statement saying “we are deeply offended by the suggestion that her killing by a trained sniper was in any way unintentional.”
During Friday's demonstration, clashes broke out between Palestinians throwing stones and Israeli troops firing tear gas and ammunition, according to Jonathan Pollak, an Israeli protester who witnessed the shooting of Eygi.
Pollak said the violence had subsided about a half hour before Eygi was shot, after protesters and activists had withdrawn several hundred meters (yards) away from the site of the demonstration. Pollak said he saw two Israeli soldiers mount the roof of a nearby home, train a gun in the group’s direction and fire, with one bullet hitting Eygi.
Israel said its inquiry into Eygi’s killing “found that it is highly likely that she was hit indirectly and unintentionally by (Israeli army) fire which was not aimed at her, but aimed at the key instigator of the riot.” It expressed its “deepest regret” at her death.
International Solidarity Movement, the activist group Egyi was volunteering with, said it “entirely rejects” the Israeli statement and that the “shot was aimed directly at her.”
The killing came amid a surge of violence in the West Bank since the Israel-Hamas war began in October, with increasing Israeli raids, attacks by Palestinian militants on Israelis, attacks by Israeli settlers on Palestinians and heavier military crackdowns on Palestinian protests.
Israel says it thoroughly investigates allegations of its forces killing civilians and holds them accountable. It says soldiers often have to make split-second decisions while operating in areas where militants hide among civilians. But human rights groups say soldiers are very rarely prosecuted, and even in the most shocking cases — and those captured on video — they often get relatively light sentences.
The Palestinian Authority held a funeral procession for Eygi in the West Bank city of Nablus on Monday. Turkish authorities said they were working on repatriating her body to Turkey for burial in the Aegean coastal town of Didim, as per her family’s wishes.
Eygi's uncle said in an interview with the Turkish TV channel HaberTurk that she kept her visit to the West Bank secret from at least some of her family members. She said she was traveling to Jordan to help Palestinians there, he said.
"She hid the fact that she was going to Palestine. She blocked us from her social media posts so that we would not see them,” Yilmaz Eygi said.
The deaths of American citizens in the West Bank have drawn international attention, such as the fatal shooting of a prominent Palestinian-American journalist, Shireen Abu Akleh, in 2022 in the Jenin refugee camp.
Several independent investigations and reporting by The Associated Press determined that Abu Akleh was likely killed by Israeli fire. Months later, the military said there was a “high probability” one of its soldiers had mistakenly killed her but that no one would be punished.
In January 2022, Omar Assad, a 78-year-old Palestinian-American, died of a heart attack after Israeli troops at a checkpoint dragged him from his car and made him lie facedown, bound, temporarily gagged and blindfolded. The military ruled out criminal charges and said it was reprimanding one commander and removing two others from leadership roles for two years.
The U.S. had planned to sanction a military unit linked to abuses of Palestinians in the West Bank but ended up dropping the plan.
The deaths of Palestinians who do not have dual nationality rarely receive the same scrutiny.
Human rights groups say Israel military investigations into Palestinians' deaths reflect a pattern of impunity. B’Tselem, a leading Israeli watchdog, became so frustrated that in 2016 it halted its decades-long practice of assisting investigations and called them a “whitewash.”
Last year, an Israeli court acquitted a member of the paramilitary Border Police charged with reckless manslaughter in the deadly shooting of 32-year-old Eyad Hallaq, an autistic Palestinian man in Jerusalem’s Old City in 2020. The case had drawn comparisons to the police killing of George Floyd in the United States.
In 2017, Israeli soldier Elor Azaria was convicted for manslaughter and served nine months after he killed a wounded, incapacitated Palestinian attacker in the West Bank city of Hebron. The combat medic was caught on video fatally shooting Abdel Fattah al-Sharif, who was lying motionless on the ground.
That case deeply divided Israelis, with the military saying Azaria had clearly violated its code of ethics, while many Israelis — particularly on the nationalist right — defended his actions and accused military brass of second-guessing a soldier operating in dangerous conditions.
Associated Press reporters Matthew Lee and Aamer Madhani in Washington contributed to this report.
Follow AP’s Gaza coverage at https://apnews.com/hub/israel-hamas-war
This undated family photo provided by the International Solidarity Movement on Friday, Sept. 6, 2024, shows Aysenur Ezgi Eygi of Seattle. (Courtesy of the Eygi family/International Solidarity Movement via AP)
ADDS WITNESS SAYS: Two fellow activists of Aysenur Ezgi Eygi, 26, who a witness says was fatally shot by Israeli soldiers while participating in an anti-settlement protest in the West Bank, carry posters with her name and photo during Eygi's funeral procession in the West Bank city of Nablus, Monday, Sept. 9, 2024. (AP Photo/Nasser Nasser)
