Morgan Stanley (NYSE:MS) shares are climbing Tuesday as a cooler-than-expected inflation reading slashed the odds of a near-term Fed rate hike and strong quarterly results from Wall Street peers set a constructive tone heading into the bank’s own earnings report tomorrow.
Morgan Stanley stock is gaining positive traction. Why is MS stock advancing?
CPI Surprise Takes a July Rate Hike Off the Table
The spark behind Tuesday’s move was a June price report that caught markets off guard. Consumer prices fell 0.4% from the prior month bringing the headline annual rate to 3.5% while the core reading, which sets aside volatile food and energy costs, came in flat on a monthly basis. That left the year-over-year core figure at 2.6%.
Bond yields retreated on the news and the probability of a rate increase at the Fed’s July gathering collapsed from 40% to just 16%, according to CME FedWatch data, giving rate-sensitive financial stocks room to breathe.
