Level 1 — Absolute Beginner
Every month, the government tells people how much prices have changed. This report is called the CPI.
On August 12, the government said prices went up a little in July, but not too much.
Stock prices went up after people read the report. The Dow, the S&P 500, and the Nasdaq all rose.
Two companies, CoreWeave and Super Micro Computer, did very well. Their stock prices jumped a lot.
- government
- the group of people who run and make decisions for a country
- price
- the amount of money something costs
- report
- a written or spoken account giving information about something
- stock
- a small share of ownership in a company that can be bought or sold
- rise
- to go up or increase
- company
- a business that makes or sells goods or services
- jump
- to increase suddenly and by a large amount
- inflation
- a general increase in prices over time
Level 2 — Elementary
US stocks rose on August 12 after the government released its July Consumer Price Index, a report that measures how fast prices are rising across the economy.
The report showed inflation cooling roughly as economists had expected, easing fears that the Federal Reserve might need to raise interest rates or delay cutting them at its next meeting in September.
The Dow Jones Industrial Average stayed close to flat, while the S&P 500 rose about 0.3 percent and the Nasdaq Composite climbed about 0.7 percent, helped by strong earnings from technology companies.
Cloud computing company CoreWeave jumped 18 percent after narrowing its losses and meeting revenue expectations, while Super Micro Computer surged 9 percent after beating earnings forecasts.
- economy
- the system of trade, industry, and money in a country or region
- ease
- to make a problem or worry less severe
- interest rate
- the percentage a bank or lender charges to borrow money
- Federal Reserve
- the central banking system of the United States
- earnings
- the profit a company reports for a period of time
- revenue
- the total amount of money a company brings in from sales
- surge
- to increase suddenly and strongly
- forecast
- a prediction about what will happen in the future
Level 3 — Intermediate
US equity markets climbed on August 12 after the Labor Department's July Consumer Price Index showed headline inflation rising 0.1 percent for the month, following a 0.4 percent decline in June, with the annual rate holding at 3.4 percent, in line with Wall Street forecasts.
Core CPI, which strips out volatile food and energy prices, rose 0.2 percent for the month and 2.5 percent from a year earlier, matching economist expectations and reinforcing hopes that the Federal Reserve would have room to cut interest rates at its September 16 meeting without reigniting inflation.
The Dow Jones Industrial Average traded roughly flat, while the S&P 500 added about 0.3 percent and the Nasdaq Composite gained around 0.7 percent, as investors weighed the inflation data alongside a fresh batch of technology sector earnings.
Cloud infrastructure provider CoreWeave surged 18 percent after narrowing its per share loss and meeting quarterly revenue targets, while server maker Super Micro Computer climbed 9 percent after topping earnings estimates, extending a rally that had been interrupted the previous session by concerns over the Iran standoff and oil prices above 83 dollars a barrel.
- equity market
- the market where shares of publicly traded companies are bought and sold
- headline inflation
- the total rate of price increase, including food and energy
- core CPI
- an inflation measure that excludes volatile food and energy prices
- volatile
- likely to change quickly and unpredictably
- reignite
- to cause something, such as inflation, to start increasing again
- infrastructure
- the basic physical systems and facilities needed for a business or economy to run
- quarterly
- occurring or reported once every three months
- rally
- a period of rising prices in a financial market
Level 4 — Advanced
Wall Street advanced on August 12 after the Labor Department's July Consumer Price Index showed headline inflation ticking up 0.1 percent month over month, a modest reversal from June's 0.4 percent decline, while the annual rate held steady at 3.4 percent, matching consensus estimates and defusing fears of an upside surprise that might have complicated the Federal Reserve's policy calculus.
Core CPI, which excludes the volatile food and energy components, advanced 0.2 percent on the month and 2.5 percent year over year, precisely in line with forecasts, reinforcing market expectations that the Fed retains sufficient latitude to lower rates at its September 16 meeting without risking a renewed acceleration in price pressures.
Equity indices responded favorably, if unevenly: the Dow Jones Industrial Average traded essentially flat, while the S&P 500 advanced roughly 0.3 percent and the Nasdaq Composite outperformed with a 0.7 percent gain, propelled disproportionately by a fresh wave of technology sector earnings that overshadowed the macroeconomic data itself.
Cloud infrastructure provider CoreWeave led individual gainers with an 18 percent surge after narrowing its per share loss and meeting quarterly revenue guidance, while server manufacturer Super Micro Computer added 9 percent on an earnings beat, together helping the market resume a rally that had briefly stalled in the prior session amid the Iran standoff and crude oil trading above 83 dollars a barrel.
- consensus estimate
- the average forecast among a group of economists or analysts
- defuse
- to make a difficult or tense situation less dangerous or worrying
- policy calculus
- the reasoning and factors a policymaker weighs before making a decision
- latitude
- freedom or flexibility to act or decide within certain limits
- macroeconomic
- relating to the economy as a whole rather than individual markets or firms
- disproportionately
- to an extent that is too large or small in relation to something else
- guidance
- a company's own forecast of its future financial performance
- stall
- to stop making progress temporarily
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