New York
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Stocks hit record highs Thursday after August inflation data principally matched expectations, reaffirming traders’ hopes that the Federal Reserve will cut rates of interest in September.
The Dow rose 617 factors, or 1.36%, and closed at 46,108, crossing the 46,000-point mark for the primary time.
It’s a symbolic milestone for the blue-chip index, and emblematic of the inventory market’s persistent rise regardless of tariff uncertainty and signs of weakness within the economic system.
The broader S&P 500 rose 0.85%, and the tech-heavy Nasdaq gained 0.72%. All three main indexes closed at record highs.
Inflation knowledge launched Thursday morning confirmed shopper costs ticked up in August. However, the rise in headline annual inflation and a core measure of inflation that excludes meals and vitality got here in according to Wall Street’s expectations.
Markets cheered as knowledge confirmed a comparatively in line inflation report that paves the best way for the Fed to cut rates of interest this month.
“Thursday’s CPI was in line with expectations and will not derail the Federal Reserve’s expected rate cut at the September meeting,” Skyler Weinand, chief funding officer at Regan Capital, mentioned in an e-mail.
The Russell 2000, an index of smaller corporations which might be extra delicate to rates of interest, soared 1.83% and hit its highest stage this yr as traders embraced optimism a couple of Fed rate cut in September.
“Stocks are in full-on rally mode … thanks to an ‘all-clear’ signal from the CPI report,” Steve Sosnick, chief strategist at Interactive Brokers, mentioned in a notice.
While headline annual inflation ticked up, considerations in regards to the job market are additionally elevated, that means the Fed will doubtless cut charges by a quarter-point in September, in keeping with Bill Adams, chief economist at Comerica Bank.
Labor Department knowledge launched on Thursday confirmed one of many largest weekly will increase in jobless claims seen in additional than a yr.
Investors flocked to bonds due to indicators of a slowdown within the labor market. That pushed Treasury yields decrease: The 10-year Treasury yield briefly fell under 4% and hit its lowest stage since April. Bond costs and yields transfer in reverse instructions.
Traders are pricing in a 93% probability the Federal Reserve will cut its benchmark curiosity rate by 1 / 4 level at its coverage assembly subsequent week, with a 7% probability of a jumbo half-point cut.
Elsewhere in markets, Warner Bros. Discovery shares (WBD) surged 29% after studies that Paramount Skydance is making ready a bid for the corporate. Warner. Bros Discovery is NCS’s father or mother firm.