Optimism in the markets thanks to stable inflation data

The stock markets surged significantly in the afternoon after key inflation data, represented by the PCE Price Index, aligned with forecasts. This news bolstered hopes for further interest rate cuts by the US Federal Reserve. The Personal Consumption Expenditures Price Index, the central bank’s preferred inflation measure, showed a slight increase year-over-year in August. However, the results did not surprise economists. On Wall Street, the report was welcomed with relief as it indicates that inflation risks remain manageable. This provides the Fed with more leeway to continue its monetary easing. For investors, these are positive signals that the economy can be supported without the risk of escalating inflation. This positive sentiment helped the major indices recover some of the losses from a recent three-day losing streak, and stock prices rose across sectors. The stock market tends to overreact to news; significant price declines can thus offer good opportunities to acquire high-quality stocks. Among the affected stocks was Ruger. The shares of this company are usually not very volatile and recorded only four movements over 5% in the last twelve months. The fact that the price still moved significantly indicates that the market considers this news important. The previous major price increase occurred three days ago when Beretta Holding announced its significant acquisition of Ruger shares. The European weapons manufacturer acquired 1,250,100 shares of Ruger worth about $45.9 million, corresponding to a 7.735% stake. Although Beretta currently has no takeover intentions, it would like to initiate talks with Ruger management about potential business and strategic partnerships. This news overshadowed developments in Canada, where the government intended to announce details of a compensation program for banned assault weapons and a gun control group demanded the inclusion of the SKS rifle. Ruger has risen by 24.2% since the beginning of the year, reaching a new 52-week high of $43.28 per share. Investors who bought Ruger shares worth $1,000 five years ago are now facing an investment value of $697.19. Riding the technology wave are Nvidia and AMD, which are near their all-time highs – primarily due to their role in the world of generative artificial intelligence, which will have a significant impact on large companies.