Traders work the floor at the NYSE in New York.
Brendan McDermid | Reuters
The S&P 500 and Nasdaq Composite popped to record highs Wednesday, adding to their strong 2024 performances, as a lighter-than-expected U.S. consumer inflation report.
The broad market index gained 0.6%, as did the tech-heavy Nasdaq. The Dow Jones Industrial Average climbed 147 points, or 0.4%, and was also trading earlier within reach of its record levels.
The CPI rose 0.3% for the month of April, less than the Dow Jones estimate for a 0.4% monthly increase. The gauge increased by 3.4% year over year, in line with expectations. Monthly and yearly numbers for core CPI, which excludes volatile food and energy prices, were both in line as well.
The report boosted expectations for Federal Reserve rate cuts in the near future. Fed funds futures trading data now suggests a 51.7% likelihood that the U.S. central bank will ease rates at its September meeting, according to CME FedWatch Tool. This is up from Tuesday’s 44.9% chance of a rate cut the same month.
Stocks have been on a tear this year, as expectations for lower Fed rates and enthusiasm around artificial intelligence â and its potential to boost profits â lifted investor sentiment. The S&P 500 is up more than 10% year to date. That said, the broad market index stumbled in the past month as worries over sticky inflation pressured equities.
SPX year to date
Those concerns were quickly assuaged by new data and comments from Fed officials indicating rate hikes are unlikely going forward.
Market leaders such as Nvidia popped upon the reading, with shares of the GPU manufacturer rising 1%. Yields on the benchmark U.S. 10-year Treasury and 2-year Treasury dipped.
Source Agencies
