US stocks mostly higher as Fed's key inflation measures slows more than expected

Investing.com-- U.S. stocks were mostly higher Friday, as a key inflation reading showed the Fed's battle against inflation remains on track, firming expectations for rate cuts as soon as next month.

At 13:14 ET (17:14 GMT), the Dow Jones Industrial Average fell 62 points, or 0.2%, the S&P 500 gained 0.2%, and NASDAQ Composite climbed 0.4%.

July Inflation firms up rate-cut bets

The core Personal Consumption Expenditure index, the Fed's preferred measure of inflation, rose 2.6% in July on an annual basis, compared with an estimate of 2.7%. On a monthly basis, it rose 0.2%.

The data added to expectations for the Fed to cut rates as soon as next month, with traders now pricing in a 68% chance for a 25 basis point cut, and a 32% chance for a 50 bps cut.

"This reading should provide Chair Powell and the broader FOMC with continued comfort to proceed with rate cuts beginning at September's meeting," Macquarie said in a note.

Dell lifts annual forecasts, Ulta falls on guidance cut, Lulu gives up gains; Intel jumps on foundry spinoff report

Dell (NYSE:DELL) stock rose over 3% after the tech giant lifted its annual forecasts following better-than-expected quarterly results underpinned by record AI server revenue.

Dell reported strong AI revenue, orders, and ISG margins in the quarter, UBS said, "validating that several of the issues last qtr were transitory as expected and not reflective of soft margins across its AI server business."

Ulta Beauty (NASDAQ:ULTA) stock fell 4% after it cut its annual sales and profit forecasts, hurt by slowing demand for higher-priced cosmetics and fragrances at its stores.

Lululemon Athletica (NASDAQ:LULU) reversed gains to trade 1% lower after the athletic apparel retailer cut its annual sales and profit forecasts amid slowing demand slowed in North America.

Intel (NASDAQ:INTC) stock rose over 5% after Bloomberg reported that the tech giant is considering splitting off its foundry business and scrapping plans for new factories, as it tries to weather a sharp slowdown.

A potential spin off Intel's foundry business would create immediate value for shareholders, Wedbush said, as mounting losses in the business are weighing on Intel's valuation.

(Ambar Warrick contributed to this article.)

This article first appeared in Investing.com