S&P 500 rises to new record, shaking off inflation fears

The S&P 500 climbed to an all-time excessive on Thursday as traders shrugged off a key inflation report that confirmed a bigger-than-expected enhance in value pressures.

The broad fairness benchmark rose 0.6% to hit an intraday document of 4,249.74, overtaking its May 7 excessive after the market traded sideways for a month. The Dow Jones Industrial Average superior 120 factors, whereas the Nasdaq Composite traded 0.4% increased even with bond yields rising.

Consumer costs for May accelerated at their quickest tempo for the reason that summer time of 2008 amid the financial restoration from the pandemic-triggered recession, the Labor Department reported Thursday.

The client value index, which represents a basket together with meals, power, groceries and costs throughout a spectrum of products, rose 5% from a 12 months in the past. Economists surveyed by Dow Jones had been anticipating a achieve of 4.7%.

“I think there were a lot of people who held back, who wanted to see the hotter inflation number,” CNBC’s Jim Cramer mentioned on “Squawk on the Street.” “Now they’ve said, ‘OK, now that’s over with. Let’s do some buying.’ Because they’ve been on the sideline and they want to get in. I don’t think that’s actually usual these days because there’s still so much buying power out there. People want in.”

Fears of spiking inflation have weighed on the inventory market within the final month, with traders apprehensive the bounce in costs will increase prices for firms, spark a transfer increased in rates of interest and trigger the Federal Reserve to take away its straightforward cash insurance policies.

“This CPI isn’t likely to change the narrative dramatically and there are still indications that inflation momentum is set to abate in the coming months,” Adam Crisafulli, founding father of Vital Knowledge, mentioned in a word Thursday.

Many economists additionally mentioned the surge in used automobile prices for the month might have skewed the inflation studying. Used automobile and truck costs jumped greater than 7%, accounting for one-third of the overall enhance for the month, in accordance to the Bureau of Labor Statistics. The bounce in used automobile costs possible displays a short lived phenomenon associated to the pandemic and auto provide.

A separate report launched Thursday confirmed that jobless claims for the week ended June 5 got here in at 376,000, versus a Dow Jones estimate of 370,000. The complete nonetheless marked the bottom of the pandemic period.

UPS shares rose about 1% after an upgrade from JPMorgan. Shares of Boeing and Delta Air Lines have been additionally increased.

Video-game retailer and meme inventory GameStop fell 9% even after the corporate tapped former Amazon executive Matt Furlong to be its next CEO and mentioned that gross sales rose 25% final quarter. The firm additionally mentioned it might promote up to 5 million further shares.

— CNBC’s Hannah Miao contributed to this story.

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