US stocks rebound to close higher as producer inflation slows

By Ovunc Kutlu

ANKARA (AA) - US stocks closed higher Wednesday, rebounding from massive losses recorded the previous day, as a rise in producer inflation in August showed a slowdown.

Producer inflation rose annually to 8.7%, according to Labor Department figures. The latest figure is a significant decline from July’s 9.8% increase and the 11.3% gain in June.

At the final bell, the Dow was up 30 points, or 0.1%, to 31,135. The blue-chip index lost 3.94% on Tuesday.

The S&P 500 added 13 points, or 0.34%, to close at 3,946 after plummeting 4.32% in the previous session.

The tech-heavy Nasdaq gained 86 points, or 0.74%, to finish the day at 11,719. It dove a whopping 5.16% the previous day.

The massive sell-off Tuesday was the worst single-day loss of 2022 for the indexes, and it came after US annual consumer inflation hit 8.3% in August, above estimates of an 8.1% annual increase.

This created worries that the Federal Reserve could make a rate hike of 100 basis points next Wednesday, instead of an interest rate increase of 75 basis points.

The probability of the Fed making a rate hike of 100 basis points climbed to as high as 34% Wednesday before falling to 22%, according to the FedWatch Tool provided by US-based global markets company Chicago Mercantile Exchange Group.

The VIX volatility index, also known as the fear index, fell 3.6% to 26.29. The 10-year US Treasury yield was down 0.3% to 3.412%.

While the dollar index decreased 0.14% to 109.67, the euro was up 0.1% to $0.9978 against the dollar.

Precious metals were mixed with gold losing 0.4% to $1,695 but silver soared 1.2% to $19.58.

Oil prices were up more than 1%. Global oil benchmark Brent crude was trading at $94.29 a barrel for a 1.2% gain and the US benchmark West Texas Intermediate was around $88.78 -- a 1.7% increase.